August 19, 2015
Healthcare and Entrepreneurship
Posted by Gordon Smith

My friend and law school classmate Henry Olsen has written a provocative article about two proposals by Republican presidential candidates (Walker and Rubio) to replace Obamacare. As Henry observes, "The key challenge ... has always been what to do once the monster is killed." And the answer to that question depends on why you dislike Obamacare in the first place. Here is Henry again:

The more libertarian branches of conservatism often emphasize the cost of covering tens of millions of people and the alleged dependence on government Obamacare would create. If cost and dependence are the problems, then the solution cannot be government subsidized universal coverage even if that coverage is provided by a competitive, private insurance market.

The Reagan wing of the conservative movement, however, is worried more about the way that Obamacare places the federal government in charge of virtually every aspect of the health care system than it is about providing financial assistance to people in need. This view places the human needs first and the cost and "dependence" questions second, just as Ronald Reagan did as both Governor and President.

I don't have deep thoughts about our health care system, though my concerns about Obamacare have mainly been of the latter variety. (Of course, placing the federal government in charge also elicits concerns about costs, so the two sets of concerns are not mutually exclusive.)

As a non-expert on health care, I wonder if we might someday have a private insurance market (presumably government subsidized) that is separate from employment? The current system seems (anecdotally) like a significant drag on employee mobility and entrepreneurship. I see people talking about how the healthcare system needs entrepreneurship, but it seems to me that entrepreneurship needs a new healthcare system. Is anyone talking about that possibility? 

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March 25, 2014
If CJ Roberts wants a narrow ruling, I've got the vehicle he needs
Posted by Steve Bainbridge

The Wall Street Journal live blog of the contraception mandate cases before the Supreme Court reports that:

Chief Justice John Roberts suggested he was thinking of a narrow ruling allowing closely held companies like Hobby Lobby Stores Inc. to claim a religious exemption, while leaving aside more-complicated ownership structures of publicly traded corporations to another day — a position that Justice Stephen Breyer indicated he might, or might not, be open to.

If you'll pardon one more episode of self-promotion, reverse veil piercing would provide the basis for just such a narrow ruling. As I observed in A Critique of the Corporate Law Professors’ Amicus Brief in Hobby Lobby and Conestoga Wood, which is now available in final form at the the Virginia Law Review Online:

In another red herring, the Brief argues that:

If this Court were to accept the arguments being advanced by Hobby Lobby and Conestoga, it would … invite … disruptive proxy contests … regarding whether the corporation should adopt a religion and, if so, which one.

Proxy contests are principally an issue for public corporations, while RVP-I—like forward veil piercing—is exclusively an issue for close corporations. The claim is thus disingenuous, at best. Nevertheless, this claim—while false—does provide a valuable opportunity for reminding the reader that the Brief’s concern for minority shareholders with diverse interests is largely irrelevant. As this author has noted:

[A] public corporation with many shareholders holding diverse views is a poor candidate for RVP-I. In contrast, a closely held corporation – even if quite large by metrics such as assets or employees – with a small number of shareholders holding common religious beliefs is a good candidate.

Courts routinely differentiate cases for piercing the veil from cases in which the veil should not be pierced based on, inter alia, the number of shareholders in the corporation. There is no reason why they could not do the same in cases like those brought by Hobby Lobby and Conestoga Wood.

So here is a proposed narrow test, taken from my article Using Reverse Veil Piercing to Vindicate the Free Exercise Rights of Incorporated Employers, 16 Green Bag 2d 235 (2013):

Analysis of the RVP-I cases thus suggests a three-pronged version of RVP that should be adopted in the mandate cases:

  1. Is there such substantial identity of the shareholder(s)’s religious beliefs and the manner in which the corporation is operated and the purposes to which it is devoted that the corporation is effectively the shareholder’s alter ego?
  2. How strong is the government’s interest in ensuring that the corporation’s employees get the mandated insurance coverage?
  3. Would reverse piercing this corporation’s veil advance significant public policies?

As to the first prong, Judge Walton’s analysis in Tyndale provides a useful model for future courts to follow.

  • Veil piercing is a close corporation doctrine.39 In this context, in particular, a public corporation with many shareholders holding diverse views is a poor candidate for RVP-I. In contrast, a closely held corporation – even if quite large by metrics such as assets or employees – with a small number of shareholders holding common religious beliefs is a good candidate.
  • Do the corporation’s articles of incorporation include a statement of purpose referencing religious beliefs and goals?
    Is the ownership structure of the corporation designed to ensure continuity of its religious purposes even after the original founders have retired or died?
    Are the directors and officers of the corporation obliged to share the founders’ religious beliefs? If so, are they required to document that fact, such as by signing a statement of faith?
    Are religious practices such as devotions, prayer, scripture reading, or worship services routinely made a part of corporate meetings?
    Are such practices made available to employees?
    Is some substantial portion of the corporation’s profits donated to religious charities or otherwise used to advance the founders’ religious beliefs? The biblical concept of a tithe springs to mind here as a possible metric.

The more of these factors that a court finds to be present, the more willing the court should be to treat the corporation as the shareholder’s alter ego.

Turning to the second prong, the government contends it has an interest in ensuring that Americans have access to the health insurance coverage required by the mandate. Whether or not that interest rises to the level of a compelling one that would justify infringing on free exercise and RFRA rights remains to be deter- mined. In evaluating the government’s interest, however, courts should note that the government has already undermined the mandate by carving out exemptions for grandfathered plans, employers with fewer than 50 employees, “member[s] of a recognized religious sect or division thereof” who have religious objections to the con- cept of health insurance, or religious employers [as defined in the regulations].” As Judge Walton observed, a “law cannot be regarded as protecting an interest of the highest order . . . when it leaves appreciable damage to that supposedly vital interest unprohibited.”

As for the final prong, the government has tried to minimize the significance of the issues at stake by referring to the plaintiffs’ interests rather than their rights. Conduct that is motivated by religious belief is accepted as one of the ways in which people exercise their religious freedom, however, even when the conduct occurs in a commercial setting. As such, the strength of the public policy issues at stake in the mandate cases go far beyond the homestead policy at issue in the seminal Minnesota cases. The issues at stake here arise out of the First Amendment, not a mere statute.

The values protected by the religious freedom clauses of the First Amendment “have been zealously protected, sometimes even at the expense of other interests of admittedly high social importance.” Accordingly, “no official, high or petty, can prescribe what shall be orthodox in politics, nationalism, religion, or other matters of opin- ion or force citizens to confess by word or act their faith therein.” Because that is precisely what the plaintiffs in the mandate cases claim the government is forcing them to do, the policy prong of the RVP-I standard strongly favors the plaintiffs. 

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March 24, 2014
Pardon my self-promotion #2: My critique of the corporate law professors' brief in Hobby Lobby
Posted by Steve Bainbridge

As mentioned in my opening post, I think a key issue in the contraception mandate cases is whether form should trump substance. In my second post, I discussed my article, Using Reverse Veil Piercing to Vindicate the Free Exercise Rights of Incorporated Employers, 16 Green Bag 2d 235 (2013), in which I proposed that courts should use reverse veil piercing to provide a more coherent doctrinal framework for analyzing when substance out to trump form. As I noted in that post, some 44 corporate law professors filed an amicus brief in these cases that, at least in part, was intended to attack my argument.

I responded in A Critique of the Corporate Law Professors’ Amicus Brief in Hobby Lobby and Conestoga Wood, which is now available in final form at the the Virginia Law Review Online. In it, I argued, as the abstract explains, that:

The Patient Protection and Affordable Care Act (ACA) effected numerous changes in the legal regime governing health care and health insurance. Among the ACA’s more controversial provisions is the so-called contraceptive mandate, which requires employer-provided health care insurance plans to provide coverage of all FDA approved contraceptive methods. 

On March 25, 2014, the Supreme Court will hear oral argument in the Hobby Lobby and Conestoga Wood cases, in which the shareholders of two for-profit family-owned corporations argue that requiring them to comply with the contraception mandate violates the Religious Freedom Restoration Act. 

Forty-four law corporate law professors filed an amicus brief in these cases, arguing that the essence of a corporation is its “separateness” from its shareholders and that, on the facts of these cases, there is no reason to disregard the separateness between shareholders and the corporations they control. The Brief is replete with errors, overstated claims, or red herrings, and misdirection.

Contrary to the Brief’s arguments, basic corporate law principles strongly support the position of Hobby Lobby and Conestoga Wood. In particular, the doctrine known as reverse veil piercing provides a clear and practical vehicle for disregarding the legal separateness of those corporations from their shareholders and thus granting those shareholders standing to assert their free exercise rights.

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Pardon my self-promotion: Hobby Lobby and reverse veil piercing
Posted by Steve Bainbridge

As mentioned in my opening post, I think a key issue in the contraception mandate cases is whether form should trump substance. If Hobby Lobby were David Green's sole proprietorship, there is no question but that he would be able to assert his RFRA and First Amendment claims. Should that change simply because he incorporated his business?

Unfortunately, whether they have allowed incorporated employers to raise such claims or not, courts have failed to articulate a coherent doctrinal justification for their holdings. 

In my article, Using Reverse Veil Piercing to Vindicate the Free Exercise Rights of Incorporated Employers, 16 Green Bag 2d 235 (2013), I proposed that courts should use reverse veil piercing to provide a more coherent doctrinal framework.

Reverse veil piercing (RVP) is a corporate law doctrine pursuant to which a court disregards the corporation’s separate legal personality, allowing the shareholder to claim benefits otherwise available only to individuals. The thesis of this article is that RVP provides the correct analytical framework for vindicating certain constitutional rights.

Assume that sole proprietors with religious objections to abortion or contraception are protected by the free exercise clause of the First Amendment and the Religious Freedom Restoration Act (RFRA) from being obliged to comply with the government mandate that employers provide employees with health care plans that cover sterilizations, contraceptives and abortion-inducing drugs. Further assume that incorporated employers are not so protected. This article analyzes whether the shareholders of such employers can invoke RVP so as to vindicate their rights.

At least one court has recognized the potential for using RVP in the mandate cases, opining that these cases “pose difficult questions of first impression, including whether it is “possible to ‘pierce the veil’ and disregard the corporate form in this context.” The court further opined that that question, among others, merited “more deliberate investigation.” This article undertakes precisely that investigation.

Invoking RVP in the mandate cases would not be outcome determinative. Instead, it would simply provide a coherent doctrinal framework for determining whether the corporation is so intertwined with the religious beliefs of its shareholders that the corporation should be allowed standing to bring the case. Whatever demerits RVP may have, it provides a better solution than the courts’ current practice of deciding the issue by mere fiat.

This proposal met with some considerable hostility from a segment of the corporate law academy, which will be the subject of my next post.

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Symposium on Sebelius v. Hobby Lobby Stores, Inc.
Posted by Gordon Smith
On Tuesday, March 25, the United States Supreme Court with hear arguments in Sebelius v. Hobby Lobby Stores, Inc. The question presented in that case is whether the Religious Freedom Restoration Act of 1993 "allows a for-profit corporation to deny its employees the health coverage of contraceptives to which the employees are otherwise entitled by federal law, based on the religious objections of the corporation’s owners." This case has attracted the attention of corporate law scholars, and for the next four days, we will be hosting an online symposium about the case. We have invited scholars on both sides of the issue to weigh in, and we invite you to join us for a vigorous, respectful debate over this important issue.

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April 28, 2010
Citizens United ....Something different Part II
Posted by Tamara Piety
    I promised yesterday I would prove that my concerns about how Citizens United would be used were not hypothetical. Today I will talk about where it is showing up, US v. Philip Morris USA, Inc.,, See DCCA opinion

    This was a civil RICO case filed by the United States in 1999 against several tobacco companies and two of their non-profit organizations, the Council for Tobacco Research and the Tobacco Institute. The lawsuit accused these entities of engaging in a conspiracy, taking place over a period of approximately 50 years, to mislead the public about a number of issues related to smoking including: the potential health consequences of smoking; the dangers of environmental smoke (second-hand smoke); whether nicotine was an addictive substance; whether the tobacco companies were manipulating nicotine content; whether the tobacco companies were intentionally targeting youth in their advertising and promotional efforts; whether they were intentionally marketing cigarettes as "light" or "low tar" to imply health benefits (or less detriment) the companies knew did not exist because of a phenomenon known as "compensation," and other claims.

The case went to trial in 2004 and lasted for about 9 months. In 2006 D.C. District Court Judge Kessler, issued an opinion with findings of fact and conclusions of law that ran about 1700 pages. The evidence buried in these pages is unequivocally damning.

Several years later, in 2009 the D.C. Circuit Court affirmed most of these findings in the per curiam opinion above. The defendants (and the government) filed petitions for cert. The petitions of the parties are available here. Whether the Supreme Court will agree to hear the case is unknown, but with the government seeking review as well it may do so. And issues of commercial speech and the First Amendment are raised through out the case. Indeed, the amicus brief filed by the Washington Legal Foundation and the National Association of Manufacturers explicitly says this case offers the Court the opportunity to answer the question that it left open in Nike v. Kasky, writing "This Court has recently reaffirmed that the speech of corporate actors may be entitled to full First Amendment Protection" (Page 19 of the brief which you can view here citing yes, Citizens United).

The 5th case down in the Table of Authorities is Citizens United and it is cited twice in the argument. The brief argues the lower court ignored that much of the misleading speech took place in the form of editorials, op-eds, press releases and the like and involved issues of "public concern" and thus was fully protected speech. Mind you these press releases, so-called informational pamphlets (some sent to school children purporting to educate them about the "debate"), came from a group of defendants who the record amply demonstrates did meet together with their public relations and law firms to come up with a strategy to manufacture a debate that really didn't exists since their problem was that there was scientific consensus on the basic facts about the health risks of smoking and that these facts would be very damaging to future business. Their strategy is succinctly captured in the phrase found in some internal documents and widely reported on since, "Doubt is our product." It is important to be clear on what they are asking for; they are asking for constitutional protection for the manufacture of a phony debate, to obfuscate rather than to clarify information about a product for which there is no safe level of use.

This seems an appropriate juncture to raise Justice Jackson's admonition that "the Constitution is not a suicide pact." It seems like the government ought to be able to regulate a potentially lethal product, and that regulation of advertising and marketing is a necessary part of such appropriate regulation in the public interest. Such a regulation has recently been passed in the form of the  Family Smoking Prevention and Tobacco Control Act, Pub. L. 111-31, 123 Stat. 1776 (2009). The Act permits the FDA to regulate tobacco products and includes very strict limitations on permissible forms of advertising and promotion.

    But a group of tobacco companies is attacking this statute in a District Court in Western Kentucky (much forum shopping there?) on the grounds (among others) that it violates the First Amendment. The companies even wanted to claim First Amendment protection for marketing practices like giving out free samples! The district court denied most these claims, but nevertheless found that some of the statute's regulation of color and trade dress did violate the First Amendment. The opinion is here It was issued before Citizens United came down. But taken together with the arguments raised by the Washington Legal Foundation in the Philip Morris RICO case, I think we can expect Citizens United may well be used in the future in this case as well. Only time will tell. I would worry about giving them ideas, but the connection between Citizens United and commercial speech protection claims is clearly already out there amongst firms litigating these issues. 

Later I will post some other aspects of the Philip Morris case which may be of interest to Glom readers, in particular whether a corporations can commit conspiracies or have specific intent.

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March 22, 2010
Health Care and Organizational Identity
Posted by Gordon Smith

The final tally on the Patient Protection and Affordable Care Act:

  • 219 Democrats voted in favor.
  • 178 Republicans and 34 Democrats voted against

Of the 34 Democrats who sided with Republicans, most (not all) were in Republican leaning districts. 

The Tea Party was out in force in Madison, yesterday, but to no avail. In the immediate wake of the vote, a number of my friends' Facebook status updates touched on health care. While some of them yearned for change in November, many others had the following flavor:

O beautiful for patriot dream--That sees beyond the years; Thine alabaster cities gleam--Undimmed by human tears! America! America! God shed his grace on thee; Till nobler men keep once again Thy whiter jubilee! I am extraordinarily proud to be an American on this Historic Day.

What is it about the health care debate that produces such division and such emotion? Before answering that question, I offer some thoughts on what the health care debate is not about:

  • This is not a populist story about the people triumphing over big corporations. After all, some of the scariest corporate bogeymen -- hospitals, health insurance companies, and drugs companies -- will be among the primary beneficiaries of the bill.
  • This is not just an extension of the abortion debate, though that accounts for a great deal of emotion on the margins of the debate.
  • This is not primarily about President Obama. Health care has been a divisive issue for as long as I can remember, which (thankfully) is much longer than Obama has been President.
  • This is not primarily about government spending. The Congressional Budget Office estimates that the new bill will reduce the federal budget deficit by $138 billion from 2010 to 2019. Count me among the skeptics. (Here, too.) In the end, however, the cost of this bill is not the main issue here.
  • Perhaps most surprising, this is not primarily about health care. Many of the tens of millions of uninsured Americans who will now get health insurance are people in good health, and even for those who are sick, the question of access remains. As noted by one perceptive commentator, "There will be no new access to health care if we do not have physicians to provide it." Some people are arguing that the bill will help control health care spending, but you can count me among the skeptics about that, too. I don't know whether this bill will improve health care in the United States. I hope that it does, but I do not believe the debate over health care was motivated primarily by the merits.
With all of the references to "partisan politics" in the press, you might be tempted to think that the Democrats and Republicans were just itching for a fight about anything, and health care was handy. But the wellspring of partisanship is a fundamental conflict of identities. Democrats view themselves as protectors of the weak and oppressed and describe passage of the bill as moral imperative. Meanwhile, Republicans believe that the quickest way to expanding the numbers of the weak and oppressed is to create a new government entitlement program, so they focus on the loss of freedom and responsibility that is said to accompany any expansion of the federal government. Both sides exaggerate, of course -- Ralph Nader is right in calling the bill a "major political symbol wrapped around a shredded substance" -- but organizations do that when their identities are at stake.

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December 09, 2009
Plasma Markets and Strange NYT Headlines: "Is Money Tainting the Plasma Supply?"
Posted by Christine Hurt

So begins an article that mainly focuses on the following facts:  (1) donating one's own plasma in return for being compensated (for one's time) is legal in the U.S.; (2) mostly people who need the money donate plasma (other people donate blood for free or don't donate any blood product); (3) companies who use plasma to create helpful and pricey medical products know this and so locate plasma collection centers near poor people, including near the U.S.-Mexico border; (4) because of the economic downturn, more people are donating plasma for compensation. 

However, nowhere in the article is there any suggestion that because companies compensate plasma donors, the plasma supply is unsafe.  There is a comparison with free blood donations:  one argument for not compensating blood donors is that we don't want them to lie about their medical history to donate -- so the blood received is theoretically cleaner than if we induced people to donate blood.  However, plasma donations are screened more carefully (which blood centers apparently don't have the manpower to do) and seem to be able to be "cleaned."  The only other connection of the facts to the headline is these two sentences, which stand alone: 

Away from the border as well, many plasma collection centers have historically been located in areas of extreme poverty, some with high drug abuse. That troubles some people, who say it might contaminate the plasma supply or the health of people who sell their plasma.

The "some people" could not be reached for comment.  Also, it's not just the poor drug users who may be tainting the blood supply.   The author, without quoting anyone or citing anything, states "One issue is whether novel pathogens that perhaps are found in Mexico but not in the United States might enter the plasma supply. "  The words "perhaps" and "might" appear here more than in a first-year law school exam.

What seems to bother the author is not the state of safety in the plasma supply, which the author spends almost no time investigating.  What bothers the author is that people can sell their plasma for money, which repels him.  Even though plasma regenerates, he hates it.  I'm sure he feels sorry for Jo March when she cuts her hair off to earn desparately needed money for her family and would have preferred that Jo and her sisters starve with their long hair intact.  However, the plasma donors seem happy that this option is available to them.  That author suggests that donating plasma may in fact be harmful to the donors, again without any type of factual support: 

Some Americans have been giving plasma this way as often as twice a week for decades, with no apparent ill effects. But there have not been many studies devised to detect long-term effects.
Another thing that seems to bother the author is that the companies that purchase the plasma make a lot of money from turning it into medical products. We are told that a $30 donation can create $300 worth of medicine. We are supposed to be shocked that donors don't share in more of the revenue, even though we have no idea what the cost is to turn ordinary plasma into life-saving medicine. But, companies that do this are becoming successful, having IPOs, and enriching venture capital funds. So, there's obviously a problem here.  The author also seems upset that because plasma-related products are so expensive, sometimes insurance companies balk at paying for them, even though they are useful.  And making it illegal to compensate plasma donors will surely help that problem.

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November 19, 2009
The Mammogram Conundrum
Posted by Christine Hurt

Anyone who is interested in behavioral psychology has to be fascinated by the consequences of The United States Preventive Services Task Force reporting this week that women should not get annual mammograms until age 50, instead of its earlier recommendation of age 40.  I turned 40 last December and so have had one test; I feel a little like my sister did when Texas raised the drinking age from 18 to 21 when she was 19.

The Task Force reports that cost-benefit analysis dictate less screening for women age 40-50 because the modest benefits are outweighed by the harms of false positives, which result in anxiety and further testing.  The report states that mammograms save 1 in 1,904 women in the 40-50 age group and 1 in 1,339 women in the 50-59 age group.  From the report:

The 6 models produced consistent rankings of screening strategies. Screening biennially maintained an average of 81% (range across strategies and models, 67% to 99%) of the benefit of annual screening with almost half the number of false-positive results. Screening biennially from ages 50 to 69 years achieved a median 16.5% (range, 15% to 23%) reduction in breast cancer deaths versus no screening. Initiating biennial screening at age 40 years (vs. 50 years) reduced mortality by an additional 3% (range, 1% to 6%), consumed more resources, and yielded more false-positive results. Biennial screening after age 69 years yielded some additional mortality reduction in all models, but overdiagnosis increased most substantially at older ages.

Cost-benefit analysis necessarily puts monetary values on intanglible benefits, but I do wonder what the cost value for anxiety is.  The Task Force may have simply considered the costs of additional testing, but it seems to emphasize the unnecessary anxiety as well.  From what I hear from my friends, the report has created a lot of anxiety!  Women are now anxious that they will be living with undetected cancer.  That has to be put into the equation as well, I guess.

So much that we are told in the way of cancer prevention is reversed periodically, as this op-ed by Gail Collins points out.  Should women believe that mammograms are now not necessary?  Should they wait another few years to see if the Task Force reverses itself again?  This part of the report, which explains the choice of modeling as a methodology, makes me wonder:

Randomized trials of mammography (2–4) have demonstrated reduc-tions in breast cancer mortality associated with screening from ages 50 to 74 years.Trial results for women aged 40 to 49 years and women aged 74 years or older were not conclusive, and the trials (4, 5) had some problems with design, conduct, and interpretation. However, it is not feasible to conduct additional trials to get more precise estimates of the mortality benefits from extending screening to women younger than 50 years or older than 74 years or to test different screening schedules.

I will leave it to the real scientists to discuss the modeling methodology.

And some are skeptical that this government-appointed Task Force is already rationing health care in case the government becomes the primary purchaser of health care.

Of course, anecdote doesn't help scientific proof, but it does enter into how much anxiety this reversal causes.  Women who knew someone that caught cancer early with a mammogram thinks the report is bad.  Women who knew someone who died from cancer that went undetected with mammograms simply shrugs.  No one likes to get a mammogram, but it's not horrible.  Women are generally risk-averse and used to going to see doctors on an annual basis, so they generally do what experts tell them to do to avoid things like cancer, death, etc.  If a Task Force came out and said that colonoscopy was useless, people everywhere would cheer.

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September 30, 2009
Another Funny Healthcare Video
Posted by Gordon Smith

A few weeks ago, I posted an unbalanced, but funny, video on health care from the right. Here is one from the left. The woman with the Wisconsin accent made me chuckle, but the guy who speaks of his fear of living in a "communist gulag like Canada" put me over the edge.

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September 11, 2009
Choosing between health insurance and ...
Posted by Gordon Smith

This is obviously not an honest attempt at exploring the tradeoffs between buying health insurance and paying other costs of living, but it's pretty funny ...

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August 02, 2009
The Problem with Health Care Reform: A Personal Perspective
Posted by Gordon Smith

I have been thinking about Christine's assertion in her insightful post on Obama's unsatisfactory pitch for health care reform: "Hey, no one likes the health care system. We all want a better system."

While I suppose it's true that we all want a better system, I am starting to recoil at the notion that we should all dislike the health care system. During the past few months, our family has had myriad health care events, including routine checkups, radiology, physical therapy, surgery, and hospice care. We have always received timely treatment, and we have been satisfied with the quality of that treatment. As you would expect, our satisfaction varies with the treatment provider -- some are excellent and others not so much -- but I would say the same about service in restaurants, car dealerships, and grocery stores.

Maybe our treatment costs too much. I am told that the U.S. system is expensive, but I don't feel personally burdened by health costs. Yes, a good chunk of my paycheck goes towards my insurance, but we consume a great deal of medical care, so that seems like rough justice to me. Another chunk goes toward government health insurance that currently benefits people outside of my family (Medicare, Medicaid), and I am ok with that, too.

My general sense of satisfaction with the health care system doesn't seem to depend on where I live. We have lived in umpteen states from Delaware to Oregon and from Wisconsin to Louisiana and had roughly the same experiences everywhere. Sure, I would love to get uniformly better treatment at a lower cost, but none of the current reform proposals are headed in that direction. The last time I heard anything about improving the quality of my medical care was weeks ago, and the big selling point on costs has been that the federal government will not increase the amount I pay for health care. (Now, you can even scratch that selling point.)

If you are still reading, you are probably thinking something along these lines: "Of course you are happy with your health care. You make enough money that you can live in a nice community and pay for good insurance."

You would be right to say all of that, but that is precisely the point. People in the middle class tend to be more or less satisfied with their own health care. We aren't much interested in the claim that health care reform "may start us down a treacherous path toward government-encouraged euthanasia." And this is not about federally funded abortion, at least not yet, or about big, scary government limiting our freedom to be fat and addicted to tobacco. It's about the fact that Congress and the President want to add 45 million people to the ranks of the insured -- most of whom are employed and young, for what it's worth -- without impairing our access (where are the extra doctors coming from?) and without increasing our costs. Oh, right, ignore that bit about the costs.

In short, the problem with health care reform is that reformers have not made a case that health care reform will do anything other than make my life worse. Apparently, the Democrats agree with my diagnosis:

With Republicans making headway by casting the legislation as a costly government takeover, Democrats have decided they must answer the question on the minds of those now insured: “What’s in it for me?”

Will they succeed in convincing us of the need for reform? I think they have a good chance of convincing us that the regulation of health insurance companies needs to be tweaked. Beyond that, this is a tough sell. Then the issue will become whether the Democrats want to push something more ambitious through over the objection of Republicans (and Blue Dogs?). It's hard to imagine a more thrilling prospect for Republicans who want to regain control of Congress.

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July 30, 2009
Where Obama Lost Me (and Lots of Soccer/Hockey/Volleyball Moms): The Avoided Tonsillectomy
Posted by Christine Hurt

Two disclaimers:  (1) we rarely talk politics here at the Glom and (2) I voted for Obama.  That being said, Obama lost me last week.  (I think he also "jumped the shark" with the "come over for a beer" invitation, but I guess that's for another day.)

Obama lost me in his fifth press conference on health care reform.  Hey, no one likes the health care system.  We all want a better system.  It very well may be that a national health care system, while imperfect, would be better.  But the argument that Obama made, which I'm sure was vetted by lots of people before he said it (because I've watched The West Wing), completely made me want to filibuster.  I saw the headline last week, and I had meant to look at it later.  When I looked for it today, I realized that many other people had the same reaction.  President Obama:  your tonsillectomy example scares me to death.

OK, in case you don't know what I'm talking about.  Obama was trying to make an argument that in our current system, if doctors know that a more expensive, but unnecessary treatment is paid for my insurance of Medicare/Medicaid, then that's the treatment option that is suggested.  I have no idea if this is true, and I'm not sure of a good way to empirically test it.  My own experience is that my doctors are usually very cost-conscious and give me several options, but that's an "N" of 1.  So, Obama says, "So if they're looking and -- and you come in and you've got a bad sore throat, or your child has a bad sore throat, or has repeated sore throats, the doctor may look at the reimbursement system and say to himself, "You know what? I make a lot more money if I take this kid's tonsils out."  Unstated here is that under the Obama plan, your kid doesn't get his tonsils out.

AAAARRGGGHHH!  Someone needs to take the president aside and explain to him that yes, a large portion of the voting, taxpaying public fears medical overcharging.  This may be a problem, and if it is, then a new system should not have incentives to overcharge.  But another large portion of the public fears undertreatment.  Some people lie in bed worrying that they'll get cancer and it will bankrupt their family.  Other people lie in bed worrying that they have cancer, but their doctor won't order the right test that will catch it in time.  And nationalized health care really scares the second group of people because it conjures up nightmarish scenarios of waiting lists and rationing.  If the second group is going to buy in to health care reform, then you have to allay their fears, not confirm them.

As a parent, I am quite familiar with the near-continuous string of ear infections and the near-continuous string of strep throat diagnoses.  Maybe Obama has never taken the baby in for its umpteenth ear infection, hoping that someone will put in tubes and maybe someone in your house will get a full night's sleep, and then been told that his insurer requires him to go through another round of amoxicillin, which seems to be as effective as liquid Flinstone vitamins.  We have been very lucky in having great doctors that moved as quickly as possible, given standard protocols.  What drives fear into my heart is that one of my children will have strep four or five times in one season, missing 8 days of school (and that goes for me, too), but a tonsillectomy is out of the question because the federal government says no.

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July 25, 2009
Will whatever health care bill is produced by Congress increase the deficit?
Posted by Gordon Smith

Of course.”

According to Peggy Noonan, that may not be the biggest hurdle for health care legislation. She thinks that public opinion is turning against President Obama on health care, in part because we fear for our freedom:

We are living in a time in which educated people who are at the top of American life feel they have the right to make very public criticisms of . . . let’s call it the private, pleasurable but health-related choices of others. They shame smokers and the overweight. Drinking will be next....

Only a generation ago such criticisms would have been considered rude and unacceptable. But they are part of the ugly, chafing price of having the government in something: Suddenly it can make big and very personal demands on you. Those who live in a way that isn’t sufficiently healthy “cost us money” and “drive up premiums.” ...

Under a national health-care plan we might be hearing that a lot. You don’t exercise, you smoke, you drink, you eat too much, and “the rest of us have to pay for it.”

It is a new opportunity for new class professionals (an old phrase that should make a comeback) to shame others, which appears to be one of their hobbies....

Noonan thinks this "might be an unarticulated public fear," so she is going to articulate it.

I suspect that the reason it hasn't been articulated is that most people aren't as smart as Peggy Noonan and don't think about heath care in such highfalutin terms. For most people, health care is about cost and access, end of story. Policy makers and venture capitalists might worry about innovation. But that's as far as it goes for most of us, though I suspect that will be enough to stop Congress and the President this time.

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May 11, 2009
The Medical-Industrial Complex
Posted by Gordon Smith

Prepare yourself to hear this term a lot over the next few years. It's been around since the early 1970s, but the Obama Administration is preparing to tackle health care, and the "medical-industrial complex" or MIC is its target. Paul Krugman's column yesterday described an initial step in the process: "Six major industry players ... have sent a letter to President Obama sketching out a plan to control health care costs."

That's the easy part, even though it won't seem so easy. The hard part is Krugman's stake in the ground:

I would strongly urge the Obama administration to hang tough in the bargaining ahead. In particular, [the "medical-industrial complex"] will surely try to use the good will created by its stance on cost control to kill an important part of health reform: giving Americans the choice of buying into a public insurance plan as an alternative to private insurers. The administration should not give in on this point.

Actually, "public insurance ... as an alternative to private insurers" sounds a lot better than nationalizing the whole system, though I assume someone will place nationalization on the table when the public debate gets going in earnest. Frankly, nationalization doesn't have legs in the U.S. Single-payer systems destroy two attributes of our current system that rich folks value too highly: access and innovation.

As a result, the debate in this country will center on some sort of hybrid solution. We just saw the Obama Administration employ public-private partnerships in addressing the banking crisis, and we will undoubtedly see an emphasis on public-private solutions to the health care crisis. At the heart of the Obama Administration's proposal will be some sort of "guarantee" of universal coverage, and the debate will revolve around the costs associated with provided that guarantee. We'll talk more about that when the time comes because once that debate gets going, it will be all consuming. For the time being, however, Krugman is positively giddy:

The fact that the medical-industrial complex is trying to shape health care reform rather than block it is a tremendously good omen. It looks as if America may finally get what every other advanced country already has: a system that guarantees essential health care to all its citizens.

And serious cost control would change everything, not just for health care, but for America’s fiscal future. As Mr. Orszag has emphasized, rising health care costs are the main reason long-run budget projections look so grim. Slow the rate at which those costs rise, and the future will look far brighter.

I still won’t count my health care chickens until they’re hatched. But this is some of the best policy news I’ve heard in a long time.

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