Relevant and even prescient commentary on news, politics and the economy.

McConnell’s AHCA Bill Text and WP Interpretation

I have not had a chance to read through this; but, I thought I would put this out here for all of us to read, Senate Version AHCA McConnell

Updated this post with the changes proposed in the McConnell Senate Bill as taken from today’s Washington Post.

Washington Post Version

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How Senate Republicans Plan to Dismantle Obamacare; Washington Post; Haeyoun Park and Margot Sanger – Katz; June 22, 2017

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Mitch McConnell, Healthcare, and the ACA

I am always curious about why certain people make it a mission to get rid of things. I think it truly is about Addison Mitchell McConnell trying to erase the accomplishments of what the first black President Barack Obama did as the president. I did some rather easy digging and pulled up Wikipedia. here is what they said about Mitch.

As a youth, Addison (Mitch) McConnell overcame polio. He received “government-provided healthcare” in Warm Springs saving him from being disabled for the rest of his life.” Addison Mitchell McConnell

Given that you Senator McConnell received government-provided healthcare during your youth which saved you from being disabled, why do you feel the need to strip 24 million people of their healthcare? This healthcare may save their lives also.

Paul Ryan benefited from government survivor benefits which allowed him to go to college.

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Blue Dogs in NY State Legislature.

Diane Ravitch points to the New York State legislature in her blog this week. NY is a Blue State having gone Dem in presidential elections; however, the state legislature is divided with the Dems controlling the Assembly and Repubs the Senate.

What makes the New York state legislature interesting is the emergence of a Blue Dog Democrat segment of the State Assembly, which sides with the Senate Republicans on various issues. Blue Dogs (which I kind of like as a descriptor for them) conjures up thoughts of when the US Senate version were negotiating special deals before the ACA was finally passed. Not that there is a relationship between the federal and NY state variety of Blue Dogs, it still fits and the identity of Democrat is a misnomer.

The Senate Independence Campaign Committee (SICC) was formed by the Independence Party and is chaired by IDC chair Senator Jeff Klein. The SICC is a formal party campaign committee. The SICC as a party campaign committee allows donors to circumvent the stricter limits on direct donations to candidates as donations limits to party committees are much higher and the same as the limits on how much party committees can give to candidates.

Calling themselves the IDC or the Independent Democratic Caucus, they move to the influence of special interest groups. Now you would think the usage of the word “Independent” in their group name would imply they would not be swayed by any particular interest group, heh? Being the independent swing group in the NY State legislature, the IDC has power to dispense for the right donation regardless of its majority constituency. They could go with Republicans or Democrats based upon interest group influence or ideology. One would hope they would be swayed by the needs and the interests of an entire school population rather than a minority.

Charter School DonationsWhile it is not mystery to find it out, the Alliance for Quality Education (AQE) shed some light upon the IDC’s source of funding. In its report Pay to Play,” the Alliance reveals how the IDC played off Democrats in both the Assembly and the Senate with funding schools, the funding it receives from individuals, foundations, and Pacs, and who the donations went to over a six year period.

From 2011 to 2016, the IDC received $676,850 from charter school political interest groups and individuals which was spread amongst multiple recipients. The detail of who donated and to whom it went to can be found in the first table.

NYS Student EnrollmentNew York State Charter school students make up 5% of the total student population. 2.6 million students across the state attend Public schools and approximately 100,000 students attend privately run charter schools.

In 2006 the COA ruled that state government was consistently underfunding schools in a lawsuit filed in 1993 (Campaign for Fiscal Equity). The court ordered the state to provide a remedy. The state legislature and Governor Spitzer “replaced the 30 funding formulas with a needs-based, wealth equalizing formula known as the Foundation Aid, and committed to providing a $5.5 billion increase in operating aid to schools across the state over the course of four years. Only two years of the phase-in were completed and most of the funding was cut during 2010 and 2011. The state currently owes approximately$3.6 billion of that money

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Backstepping

No, not the Control Theory version of Backstepping developed around 1990 by Petar V. Kokotovic. In the Marine Corp there was a Back Stepping cadence. The entire squad or platoon would move in 15 inch steps backwards after coming to a complete halt.

It appears DOE Secretary has started to backstep on her comments on allowing states, Charter schools, and parents decide what is acceptable discrimination. The Senate Committee on Education was not too happy with her comments about letting states and schools decide. One problem still remaining is cutting the funding for the Department of Education and it’s Office of Civil Rights. This will curtail the oversight the DOE has today on local schools.

“Education Secretary Betsy DeVos on Tuesday said she will pursue allegations of discrimination “in any form,” pushing back against criticism that the Trump administration might allow private and religious schools to accept federal funding while at the same time rejecting or discriminating against LGBT students.”

Who would have thought the Michigan billionaire-iron-lady of the DOE could be moved by so called “hurtful” remarks about her very apparent indifference to discrimination? In a follow-up comment, Betsy lamented;

“’Anyone who knows me knows that they (the Senate Committee) couldn’t be further from the truth,’ she said. ‘Discrimination in any form is wrong. And I’ve said before and I’ll say again: the department is committed to ensuring that every child has a safe and nurturing environment, and we are and will be continuing to pursue allegations of discrimination in any form as well. So that has been a really hurtful thing for me personally, because it’s not who I am.’”

I guess I do not know her either and my Vulcan Mind-Meld is not working on her to find out what she is really like. Sorry Betsy, we have to take you at your word or what you do not say too! A case in point as to the impact of Betsy Devos’s efforts with school choice and the results of it can be found in Holland, Michigan very close to the DeVos homestead. “Betsy DeVos and the Segregation of School Choice.” Ms. DeVos knew what was happening in Holland and the rest of the state all along. Michigan is the laughing stock of the nation when it comes to Charter Schools.

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“Flat Earthers”

President Trump has proposed budget cuts to programs and the departments running them. Amongst those departments impacted by Trump’s proposals is the Department of Education and it’s Office of Civil Rights. “ The DOE Department of Civil Rights function is to investigate discrimination complaints in school districts across the nation and create standards for responding to allegations of sexual assault and harassment.” Trump’s decreased budget would force cuts in departmental staffing making it more difficult to investigate complaints and also enforcing the law.

As the new Secretary of the DOE, Betsy DeVos proposes giving more power to states and communities in an effort to allow them to make decisions based upon local needs. This sounds good in the telling of it as people living in these communities would probably know what is needed for their schools. Often times what is ignored in state policy, is the favoring of wealthier districts over poor districts, majority citizens over minority citizens, the disabled, and those needing special education in order to learn. These are costly additions to a budget and local citizens do not like to pay taxes. Nowhere else can this be seen more vividly as it is in DeVos’s home state of Michigan where Detroit and Flint needs are played off against richer school districts. In her recent appearance in front of the Senate Education Committee, DeVos is proposing a “leap-of-faith” proposal of states getting the needs of public and private school educational correct without oversight or direction by the DOE.

In a “Return of DeVos-2” visit to the Senate Education Committee, she discusses along similar lines a proposal of allowing states to determine if private schools accepting publically funded vouchers can be allowed to discriminate amongst students. Again DeVos claims the states know better than the DOE about what is needed and necessary locally. In which case, why would we need a DOE Office of Civil Rights if states protected the needs of all students? That is sound reasoning; although historically, states do not protect all students and many fall through the cracks without the oversight.

Not liking the pushback from Democrats and those arguing back against her push to expand school of choice with no oversight, DeVos goes on to call those who oppose the program “flat-earthers” accusing those who find fault with and question her programs lacing vision and refusing to face the facts.” Some of her comments during this last meeting with the Senate Education Committee were quite revealing. Perhaps if during her nomination process, if these remarks she made had come out then, others might have voted against her. A Big If for Republicans . . .

Some of Betsy DeVos’s ideology:

1. Should states have the flexibility to decide whether private schools that accept publicly funded voucher students have the ability to discriminate amongst students for any reason?

Rep. Katherine M. Clark (D-Mass.): One private voucher school in Indiana says it can deny admission to any LGBT student or a student who comes from a homosexual or bisexual family. With regard to federal funding, Rep. Clark posed a question to Ms. DeVos of whether she would tell the state (Indiana) it could not discriminate in that way and extended the question to include involved African American students.

DeVos: “Well again, the Office of Civil Rights and our Title IX protections are broadly applicable across the board, but when it comes to parents making choices on behalf of their students …”

Rep. Clark: “This isn’t about parents making choices, this is about the use of federal dollars. Is there any situation? Would you say to Indiana, that school cannot discriminate against LGBT students if you want to receive federal dollars? Or would you say the state has the flexibility?”

DeVos: “I believe states should continue to have flexibility in putting together programs . . . ”

Rep Clark: So if I understand your testimony — I want to make sure I get this right. There is no situation of discrimination or exclusion that if a state approved it for its voucher program that you would step in and say that’s not how we are going to use our federal dollars?”

Me: Going back and forth with Ms. Devos claims it was a hypothetical question, Rep. Clark countered with it not hypothetical and her allotted time ended.

DeVos: “I go back to the bottom line — is we believe parents are the best equipped to make choices for their children’s schooling and education decisions, and too many children are trapped in schools that don’t work for them. We have to do something different. We have to do something different than continuing a top-down, one-size-fits-all approach. And that is the focus. And states and local communities are best equipped to make these decisions.”

Rep. Clark: “I am shocked that you cannot come up with one example of discrimination that you would stand up for students.”

Me: Except in many cases, states have not made those decisions and often times the decision-making dies in the legislatures who will not spend the money or make a political decision impacting themselves.

2. States should have the flexibility to decide whether students with disabilities who are using publicly funded vouchers to pay for private – school tuition should still be protected under the IDEA federal law.

Rep. Nita M. Lowey (D-NY): In voucher and voucher-like programs in which public money is used to pay for private school tuition and educational expenses, families are often required to sign away their IDEA protections, including due process when a school fails to meet a child’s needs. Lowey asked DeVos if she thought that was fair.

DeVos: “Each state deals with this issue in their own manner,”

Tens of thousands of disabled students attend private schools in Florida. Florida requires voucher recipients to give up their IDEA rights.

Me: There was a time, you could not sign away your legal rights and protections. Individuals should not have to do this.

3. High-poverty school districts get more funding than low-poverty schools.

Rep. Lucille Roybal-Allard (D-CA): Proposed education budget’s Title I plan reduces funding to high – poverty schools, according to numerous experts. Rep. Roybal-Allard asked DeVos whether she believes that high – poverty school districts should get “more funding resources” than schools with lower levels of poverty.

DeVos: “Yes, I think the reality is that they do receive higher levels of funding.”

Rep. Roybal-Allard: “Just to be clear … you do agree that high – poverty schools should receive more federal resources than lower levels of poverty schools? Was that your testimony?”

DeVos: “Yes, I think that this is the case.”

Rep. Roybal-Allard: “They don’t.”

It is clear, Ms. DeVos does not know whether schools in higher poverty areas receive more funding or not. It is relatively certain most states and local government make no additional exception for schools in higher poverty area either.

Me: Betsy lives about as far away from Detroit and Flint as she can get. Detroit schools were under State of Michigan management and were released from it in almost the same fiscal shape as when they started. Uncertified teachers can instruct in Detroit as determined by the state.

4. The administration is not shifting money for public schools in the budget in order to fund school choice experiments.

DeVos: “It is. If there are cuts to public schools, and there is new money going to school choice, that can’t mean anything else.”

5. DeVos would not say whether private and religious schools accepting students paying with public funds should be accredited or held accountable in the same way that traditional public schools are.

Rep. Mark Pocan (D-WI): On teaching practices, private schools taking public dollars claim students could learn how to read by simply putting a book in their hands. Asking DeVos if she was “going to have accountability standards” in any new school choice program.

DeVos: “States should decide what kind of flexibility they are going to allow.”

Me: I have seen similar happen in Michigan. Charter Schools may or may not offer a better education than a public school and often times the results are worse. The standard is not the same for both types of schools and there is a need for accountability. Ms. DeVos will not be bringing the much needed improvements to public education any time soon and may indeed hurt it more.

Five startling things Betsy DeVos just told Congress” Valerie Strauss, The Washington Post, May 25, 2017

The Impact of Cutting Public School Funding and How It Pays Out in Oklahoma Emma Brown, The Washington Post, May 28, 2017

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Republicans Can Seize a Political Opportunity by Backing Student Loan Reform

Allan Collinge is the founder of the Student Loan Justice Organization a grassroots citizen’s organization dedicated to returning standard consumer protections to student loans. The group was started in March of 2005 and has focused primarily on research, media outreach, and grassroots lobbying initiatives. located in Washington DC. From time to time Angry Bear has publicized Allan efforts to restore bankruptcy protection for student loan.

In a rare display of political courage and bipartisanship last week, Rep. John Katko (R-NY) filed the Discharge Student Loans in Bankruptcy Act with Rep. John Delaney (D-MD). This bill will return standard bankruptcy protections to all federal and private student loans. Katko is well ahead of the conservative curve on this issue and has a unique opportunity to revitalize the Republican Party in the current session by stepping up to lead the fight on this issue.

President Obama federalized the student loan system during his eight years in office and the nation’s student debt tab increased by $1 trillion. From these student loans, the federal government profits well over $50 billion annually from the student loan program, and also makes a profit on defaulted student loans. This is something no other lender of any loan in this country can claim. In fact, this is a defining hallmark of a predatory lending system. During the same time period, the price of college rose far faster than any other commodity, including healthcare, and this trend is continuing to accelerate today.

The student loan program is a structurally predatory lending system and Uncle Sam sits atop the hornet’s nest. What has caused this hyper-inflationary lending behemoth and its consequences is the fact that the Department of Education is not constrained by standard free-market protections like bankruptcy rights, statutes of limitations, and other standard protections existing for every other type of loan. Congress stripped these protections from student loans and in the end greatly destabilized the entire loan system.

Make no mistake: The Department of Education loves this freedom from free-market protections and fights tooth and nail behind the scenes to keep bankruptcy gone from its source of income. Since Trump was elected, the student loan swamp of unelected bureaucrats in and around the Department of Education have made bold moves to make this lending system harsher and more profitable.

Some true conservatives have noticed this problem and have begun to speak out. Jeb Bush, for example, put the return of bankruptcy protections to student loans as a plank in his presidential platform. Pundits and think tanks such as David Brooks and the Cato Institute have also publicly called for the return of bankruptcy protections to student loans. The issue screams out to conservatives for justice by sponsoring the Discharge Student Loans in Bankruptcy Act. By his actions, Congressman Katko is demonstrating to his colleagues that it’s fine, in fact,it is a great political benefit to stand up for the citizens, fight for free-market mechanisms, and against big government.

Sponsoring this bill will endear Katko to tens of thousands of Democratic voters who would have otherwise voted against him next year. There are roughly 100,000 people in his district with student loans, of which 63,000 are currently unable to pay down their loans.

While few of these voters would ultimately file for bankruptcy, all of them feel the predatory weight of the lending system on their backs, and all will appreciate having this constitutionally mandated power back on their side. I suspect that a large majority of these voters — regardless of party — will be strongly compelled to vote for him based upon this issue alone because it is that strongly held by these borrowers.

What is most interesting is that even if his Democratic challengers’ parrot Katko on this issue, his being a Republican makes the chances for success of the bill go up dramatically. No Democrat with the same position can claim this, and indeed we have seen similar Democrat bills flounder and fail in years past.

This is one of the hottest issues today in Congress and Congressman Katko is in the forefront of it with his bill. Other Republicans in Congress could benefit and capitalize on it to reduce the strong headwinds from Democrats in next year’s election. Republicans could do well in supporting this bill and avoid a crushing defeat.

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Dean Baker’s Articles on Healthcare

Barkley has mentioned this particular article several times now. I would be negligent if I did not post a link to it so we could read it. New Health Care Plan: Open Source Drugs, Immigrant Doctors, and a Public Option, 25 March 2017, CEPR, Beat The Press, Dean Baker.

There are two obvious directions to go to get costs down for low- and middle-income families. One is to increase taxes on the wealthy. The other is to reduce the cost of health care. The latter is likely the more promising option, especially since we have such a vast amount of waste in our system. The three obvious routes are lower prices for prescription drugs and medical equipment, reducing the pay of doctors, and savings on administrative costs from having Medicare offer an insurance plan in the exchanges.

This short article is worthy of a read also. Why Do Proponents of More Immigration Never Mention Doctors? 08 February 2017, CEPR, Beat The Press, Dean Baker.

If we got the pay of our doctors down to the levels in other wealthy countries it could save us close to $100 billion a year.

More on Healthcare to follow.

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Medicare does “NOT PAY FOR ITSELF”

In the comments section of an earlier post (1/3 of Medicare is Wasted), Maggie Mahar had stated to everyone; “Medicare Does Not Pay for Itself.” This is what I meant by that comment:

“For more than a decade the the federal government has borrowed to pay for the rising cost of Medicare. Debt-financing of Medicare will increase sharply as the population over 65 doubles from 2010 to 2030 and the number of beneficiaries over 85—with the greatest medical needs—triple.”

Note, using borrowed money to finance Medicare is not something happening in the future as it began more than a decade ago. Yet, as the article notes: “Members of Congress are reluctant to argue with constituents who sincerely believe that they have ‘paid for’ Medicare with payroll taxes and premiums. Most find it more convenient to tiptoe around the minefield of Medicare financings.” So the charade continues even today.

People who believe that they have paid for their Medicare with payroll taxes and premiums are terribly naïve and do not realize how much Medicare actually costs or how much “Medicare for all” would cost.

The article goes on to explain the history of how we arrived where we are today and why I make the comment on Medicare:

“In the mid-1990s, Democrats proposed to balance the Medicare budget by limiting fees paid to physicians for services, while Republicans sought to contain the costs by transferring the program to managed care insurers and capping the annual per capita rise in premium subsidies.

In 1997 the leadership in both parties agreed to a plan that would eliminate borrowing for Medicare, principally by limiting the growth in the level of fees paid to physicians. That Medicare reform, along with increasing general revenues paid by taxpayers in the highest bracket, led to a federal budget that balanced in fiscal year 2000.

The balance turned out to be short-lived. In 2001 and 2003 Congress passed debt-financed reductions in income tax rates. And in 2003 it also suspended the application of ceilings on fees set in 1997. Later that year Congress used debt to finance a new Medicare prescription drug benefit and higher payments to Medicare managed care plans.

As a result, the portion of Medicare paid for with dedicated taxes dropped from 73 percent in 2000 to 53 percent in 2010, the year that the first of the Baby Boom generation became eligible for Medicare.”

“After the 2008 election of President Obama, Democrats sought Medicare ‘savings’ for the purpose of expanding other medical services rather than balancing the budget for Medicare. In order to offset the cost of expanded PPACA medical services for families with low incomes; they placed restrictions on reimbursement rates, provided incentives for more efficient delivery of medical care, raised the Medicare tax paid by taxpayers with high-earned incomes, and applied Medicare taxation to gains from investment.”

On the other side of the political spectrum, “Republican House Budget Chairman Paul Ryan exemplifies his party’s ambivalence toward Medicare reform. He ran as the vice presidential candidate on a ticket in 2012 that attacked the Affordable Care Act’s limits on Medicare reimbursements. Yet before and after that election, he incorporated those very cost-saving measures into his own budget plans.”

Incumbents from “both parties find it awkward to even talk about the practice of borrowing to pay for Medicare. Obviously, an extra layer of interest on debt simply increases the program’s long-term cost. Any attempt to highlight that issue naturally invites the question of whether to cut Medicare costs or raise tax revenue dedicated to the program. No mainstream politician seeks to cut benefits by almost half and down to the level payable by revenues from premiums and payroll taxes. Democrats condemn any increase in payroll taxation as ‘regressive,’ while most congressional Republicans have signed a pledge to oppose any tax increase.”

Both sides of the aisle feint a reluctance to either cut Medicare benefits or increase Medicare withholding taxes and an honest discussion with their constituents regarding Medicare financing knowing full well something must be done. Indeed, it is politically expedient to kick the can or the bucket into the next decade avoiding the third rail of Medicare.

What can we do? I will answer that question in my next post.

Notes and References:
1. “Pay As You Go Medicare” Washington Monthly, Bill White, June 23, 2014

2. Maggie Mahar writes the Health Beat Blog Maggie is also the author of Money-Driven Medicine: The Real Reason Health Care Costs So Much (Harper/Collins 2006). Mahar also served as the co-writer of the documentary, Money-Driven Medicine (2009), directed by Andrew Fredericks and produced by Alex Gibney. Before she began writing about health care, Mahar was a financial journalist and wrote for Barron’s, Time Inc., The New York Times, and other publications. Her first book, Bull: A History of the Boom and Bust 1982-2003 (Harper Collins, 2003) was recommended by Warren Buffet in Berkshire Hathaway’s annual report.

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1/3 of Medicare Spending is Wasted

This was initially posted at Angry Bear September 14, 2014 by Maggie Mahar of Health Beat A little history: Dan and I invited Maggie Mahar to write at Angry Bear Blog as I was covering much of the Healthcare debate and Maggie could add much more in-depth knowledge and analysis of healthcare than I could. This is an important post as it gets down to the nitty-gritty of Medicare-For-All, things we need to know, and why it may not work.

Maggie Mahar in answer to a commenter:

You write: “That claim that one-third of Medicare spending is wasted sounds pretty questionable to me.”

This is your opinion. If you had spent the last 20 years working as a medical researcher investigating unnecessary treatment, your opinion would be of great interest to all of us; but, I’m assuming you have not done so.

Thus, you might be interested in some facts . . .

Dr. Donald Berwick, who headed up Medicare and Medicaid during the 1st half of the Obama administration has said, repeatedly, that at least 1/3 of Medicare dollars were wasted on unnecessary tests, procedures and drugs that provide no benefit for the patient. He is only one of dozens of health policy experts who have made the same statement. (Google “Health Affairs” the leading medical journal that focuses on health policy and “unnecessary treatments” Over the past 30 years, researchers at Dartmouth have provided stacks of evidence documenting unnecessary care in the U.S.

You also write: “I doubt that treatment protocols in the U.S. are all that different from other countries.”

Again, this is your opinion. Unfortunately, you are wrong.

In other countries, doctors and hospitals tend to follow evidence-based guidelines. In the U.S. a great many doctors object to the idea of someone telling them how to practice medicine even though that “someone is “science”. They value their autonomy and prefer to do things the way they have always done them. Of course this is not true of all doctors; but even when you look at protocols at our academic medical centers, you find that the way they treat similar patients varies widely.

Here, I’m not talking about how much they charge for a procedure (which also varies widely) but how many tests they order, how often they prescribe spine surgery for someone suffering from low-back pain, how often they tell a woman she needs a C-Section . . .

One big problem is that our doctors and hospitals are paid on a “fee – for service basis;” in other words, the more they do, the more they are paid.

As Dartmouth’s Dr. Eliot Fisher points out: “U.S. patients are not hospitalized more often than patients in other countries; but in the U.S., a lot more happens to you while you’re there.”

In addition, traditionally our medical schools have trained doctors to practice very aggressive medicine. The resident who orders a battery of tests is praised. Students are told “Don’t just sit there (and think). Do Something!” Traditionally, our medical culture has been a very macho culture and it is just beginning to change.

Finally, Americans tend to think that “more is always better.” Larger servings in a restaurant, bigger cars, bigger homes, etc. And when it comes to healthcare, patients in the U.S. tend to think that “more care is better care.” They are wrong. Every medical product and service carries some risk. If it provides no or little benefit, the patient is exposed to risk without benefit.

When medical protocols in the U.S. are compared to how medicine is practiced in other countries, researchers have found: —- Much unnecessary spine surgery. The rate of back surgery in the U.S. is five times higher than in the UK. Studies have shown little difference in long-term outcomes for patients who undergo back surgery compared to those who select non-surgical treatment.

The U.S. does more testing than other countries. For instance, the number of MRI and CT tests for every 1,000 people in 2010 was double the average in other OECD countries. Comparatively, there were also more tonsillectomies, caesarean sections and knee replacements. Regardless of how much more, nearly every procedure, scan and drug costs; it’s nothing compared to how out-of-whack the medical heroics thrown at Americans in the last stages of life The Cost of Health Care: A Country-by-Country Comparison

Colonoscopies are prescribed and performed more frequently than medical guidelines recommend and are given preference over less invasive tests that screen for colon cancer. Those less invasive tests are not only routinely performed in other countries, they’ve also been proven to be just as effective by the U.S. Preventative Services Task Force.

“We’ve defaulted to by far the most expensive option, without much if any data to support it,” said Dr. H. Gilbert Welch, a professor of medicine at the Dartmouth Institute for Health Policy and Clinical Practice.

In the U.S. many more patients die in ICU’s getting futile care. This is a painful, lonely way to die. In other countries, more patients are treated in hospices or allowed to go home where nurses and even doctors visit them.

Half of all heart surgeries (using stents) do no good. We know which half! But stent-makers and other providers have turned this into a big business.

– Our drug companies enjoy 20% profit margins.

– Our device-makers boast 16% profit margins.

We are over-medicated (particularly older people), and undergo too many surgeries that involve very expensive devices. Medicare covers virtually everything (even drugs that have been shown to be dangerous–until they are taken off the market). If it does not cover all of the newest treatments and products lobbyists would howl– and Congress makes sure that heads roll.

This is one reason why we don’t want to give everyone 40 to 65 a chance to enroll in Medicare. No one could afford it. (This idea was considered in the late 1990s. Do you have any idea how much 40-65 year olds would have to pay for our extraordinarily inefficient and wasteful Medicare system? On top of that and like people over 65, they would have to pay hefty sums for MediGap to Medicare advantage — private insurance plans that cover all of the things that Medicare doesn’t.

Medicare is now beginning to cut back, and over time it will refuse to pays for unnecessary surgeries (heart surgeries, unproven prostate cancer surgeries, and some hip and knee replacements, unless the patient has tried physical therapy first–and losing weight, if possible. (Some people just can’t lose weight, even under a doctor’s supervision.)

Medicare will also stop covering every new drug that comes on market, setting up a formulary and only paying for drugs that are effective — and cost-effective. The same will be true of devices.

Then — and only then — we might talk about letting people 40-65 sign up for Medicare, though in many cases, research on quality of care suggests that they would be better off with the best of our non-profit insurers: Kaiser, Geisinger, etc.

Medicare is a highly politicized bureaucracy and inevitably, Congress dictates what it can and can’t do. Medical guidelines should be set by medical researchers and doctors who have no financial interest in the outcome.

Maggie Mahar is the originator and author of the Health Beat Blog. Maggie wrote “Money-Driven Medicine: The Real Reason Health Care Costs So Much (Harper/Collins 2006),” and was the co-writer of the documentary, Money-Driven Medicine (2009), directed by Andrew Fredericks and produced by Alex Gibney.

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