Senate Procedural Redux

An interesting matter here that comes from The Hill, stating that some of the liberal Democrats are getting antsy about the current situation in the Senate. I quote below:

In an apparent warning to Senate Finance Committee Chairman Max Baucus
(D-Mont.), some liberal Democrats have suggested a secret-ballot vote every two
years on whether or not to strip committee chairmen of their gavels.

Baucus, who is more conservative than most of the Democratic
Conference, has frustrated many of his liberal colleagues by negotiating for
weeks with Republicans over healthcare reform without producing a bill or even
much detail about the policies he is considering.
“Every two years the caucus
could have a secret ballot on whether a chairman should continue, yes or no,”
said Sen. Tom Harkin (D-Iowa), the chairman of the Senate Agriculture Committee.
“If the ‘no’s win, [the chairman’s] out.

“I’ve heard it talked about before,” he added.

This procedural reform actually does not seem so radical. In fact, the House has this, and ocassionally exercises that even within the Democratic Caucus. This is how Rep. Henry Waxamn (D-CA-30) became Chair of the all powerful Committee of Energy and Commerce. I personally wanted old chair John Dingell to win (D-MI-15), but Waxman's performanc has more than pleased me.

Furthermore, at least on the House side, for now, the Democrats have kept in place the term limits on Committee Chairs which the Republicans instituted in 1994. I think again that such a move works well.

The Senate of course is a much weirder beast, and part of it too may arise from the old story of it serving as a cooling saucer. First, the Senate represents not people but the states. Looking back on the history of the insitution itself, the idea was that it is anti-democratic. State Legislatures used to elect Senators. We run treaties I think through the Senate because: a) the framers did not want the people to deal with foreign policy and b) we wanted a consensus of these sovereign entities called states to assent to something. I do not think this is a good idea, but it really underlies why the Senate operates to this day as a peculiar institution.

However, the Senate should make such reforms because Senators just serve longer, because they live longer. Also, it starts to centralize an institution that works in a highly decentralized manner. As pointed out earlier, leadership in the Senate is much weaker than in the House. However, 100 people or even a 40 member caucus can act in highly disparate ways. You then have a total coordination problem, which is something I think we see, at least on the Democratic side. Giving leadership and the caucus some check on Chairmanships would defintiely help in this regard. One should note that Republicans have not shied away from doing this. The former Republican Senior Senator from Pennsylvania, Arlen Specter, almost lost his gavel on the Judiciary Committee, because of his views on abortion.

The larger looming issue that could make a major change is the weird cloture procedures. I have essentially outlined that in a previous post. Prior to Robert Byrd's majority leadership, the Senate acted even slower than now. It required a 2/3 vote for cloture. With the growing realignment of parties, that made things difficult. So cloture changed to 3/5. However, you still have some of these matters that complicate everything.

Of course, cloture seems anti-Democratic, becuase it is. However, I want to restructure some aspects of it since cloture does seem like a weird Kabuki dance. One of the ideas behind cloture is to give more time for debate. I think that perhaps clotures should revise itself as follows. Perhaps a full cloture should act like a previous question motion in the House. Full cloture could end debate right then and there after it ripens and goes for a vote. However, should that fail, but the Senate in a majority choose to end debate, you could let that drag on for some long period of time that is finite with underlying amendments all requiring germaneness. Finally, if cloture utterly fails (less than 50) then you have the old fashioned filibuster, but that means the bill would have failed.

Also, perhaps ideas for certain motions, like the motion to proceed to consideration should not be debatable, and amendments have a more specified amount of time, like the 5 minute rule in the House. It could act as a 3 legislative day rule in the Senate.

I do not know. However, I think these things are worth thinking about in both an abstract but perhaps workable manner.

And I leave with Floyd Riddick's statement again, "the rules of the Senate are perfect, and if they change every one of them, the rules of the Senate will be perfect."

Happy Birthday, Medicare

Medicare turns 44 today. The program provided health care to America's elderly, and represented a major change in health care. Oddly, these are the people opponents of health reform prey on, because they say that the government will take things away from them.

Nate Silver at 538.com discusses how Republican opponents are so out of touch on health care. The tension has gotten me annoyed too over the past few days.

They say Medicare has destroyed medicine. It pays too little and costs the government too much and leads to rationing. Almost all of these matters are false. Medicare rates, while not generous can and do effectively handle reimbursements if one is willing to handle a lower margin, but institutions have done okay on that, and still continue to take a hefty load of Medicare patients. Rationing just does not happen. In fact, one of the problems is that it is a fee-for-service with a set rate of coinsurance for anything. It does not matter if the expensive is as effective, worse, or only marginally better than the much cheaper alternative, it tends to reimburse at the same rate. The point of cost is a problem, but if you are against a rational rationing system then you have the current irrational system I just described, and these lead to poorer outcomes.

Yet, Medicare is also wildly popular as Silver points out. It works well for consumers. Doctors and providers grumble often, but it is also not worse than not having any patients at all above the age of 65.

So what is going on here? I think it's a bit of double speak. Then again, if you look at the last quote of this Washington Post story on Jim DeMint, you see that many people just forget how valuable and important the government is. As the man says in the end "keep your government hands off my Medicare." Sadly, such disinformation like the Republicans discussion on Medicare, can work when the populace has such views.

Insurance matters

Felix Salmon links to a bunch of other analyses of how health insurance and a lot of other insurance has high counter-party risk, and thus leads to rescissions. Essentially, the insurance company looks for pre-existing conditions and see if you lied about that on your application. Thus at the moment that you actually do need an expensive service, it takes it all away and refuses to pay.

These matters of insurance do not strike me as rare, and while horrific, make some level of business sense. However, when looking too at the contracting process of insurance, no one can adjust terms of the contract to avoid this, unless that person is not a person, but rather a large entity like an employer that can spread out risk. Employer-based policies then help to reduce this risk. However, that means someone like me, with chronic conditions, must stay in employer sponsored health care.

This then only strengthens Ezra Klein's obsession with exchanges. That creates a new risk pool and a regulated market. Instead of creating a situation where the insurance company produces a standard form (and these rescissions do fall under adhesive form contracts that any first-year student can tell you about and clearly does not make sense because you expect health insurance to help cover these catastrophes), you create a market that does not allow companies to do this. However, to allow them to have a profit, you pool the risk nationally in this large market. The Massachusetts Connector, in fact, meets this criteria and this goal.

I think a move like this would give people more choice, and likely meet closer to what their intentions when entering into a health insurance contract. That is probably a good thing.

The Self-Referral Horror, or How my Profession Screwed up Health Care

I study the law, as evinced by some of my other posts that do not have anything to do with health care. However, an interesting Slate piece caught my eye. In it, it stated that doctors at one time did not do self-referrals, but as a result of the case Goldfarb v. Virginia State Bar, 421 U.S. 733 (1975) that changed. The case held that lawyers who charged the State Bar Association's suggested rate of 1% of the home price for deed matters with home purchase were involved in price fixing, since no one could get a price below that 1%.

This came to apply to health care in the following way. Doctors had professional ethics that prevented them from getting any income except through seeing patients and treating them. However, as the case showed, any sort of thing that a court could interpret as price fixing fell suspect. Here then, the concern was that cordoning physicians off from other sources in such a strict manner could lead to price fixing, which it kind of does, and as a result that, plus some of the market deregulation of the Reagan era helped create a greater incentive for self-referral. The article captures this much better than I do.

A weird area of regulatory law then arose. Rep. Pete Stark, who has fought against such self-referral, has helped pass legislation that limits physician ownership of certain thing like labs. However, the so-called Stark 1 and Stark 2 laws created a complex regulatory scheme, and it has gaping holes that do not just arise out of complexity. It prevents self-referral for the $200 lab test. It does not prevent self-referral though to a hospital that you own a stake in that specializes in orthopedic surgery, which costs $20,000, and on which the margin is greater (I made up these numbers, but the sense of the wide difference in magnitude is the key).

When we talk about capitation and all these other matters, I do not think that just imposing some sort of here's some cash this month is necessarily the only way to go, and indeed, it could act as a blunt tool. We also need to look at some of these practices of self-referral. Indeed, the now famous Atul Gawande piece mentions such practices regarding hospitals in McAllen, Texas.

Yet, the hopes for a Stark 3 that pushes for a regulatory framework that ends the most egregious of these matters (or even amends the Sherman Anti-Trust Act in this regard) is not something that will go forward. Doctors have earned huge profits here through self-referral and do not want to see it end. Unfortunately if we do not address this matter, something that really is an egregious cost-driver, how can you even push for larger more complex action?

More Compact Fun

According to a News Report that I have managed to lose a link to, the migrants under the Compact of Free Association have now lost a lot of their state funded Medicaid benefits.

Like every other state, Hawaii is facing a budget shortfall. Many services will have cuts, and state workers face furloughs or layoffs. However, the Compact Migrants' situation is unique.

First, unlike others, Hawaii leaves no money on the table dropping them. These migrants are treated like any other immigrant group. They do not qualify for a federal match (called FMAP) in Medicaid. As a result QUEST (the Medicaid Managed Care Program in Hawaii) must pay for all expenses.

While there is some weird political trouble with any "immigration" issue, as I have stated before, the compact migrants are unique. Essentially they are like legal permanent residents (LPRs), and can freely enter the country, work, and avail themselves of social services. They pay taxes too.

However, unlike any other group, including LPRs, which they are most analogous too, the federal government does not pay for compact migrants' services. Under welfare reform, and part of the conservative loves of block grants that are too small, they give states a block grant, which fails to cover these services.

Oddly enough, these same people who refuse to pay for the migrants also demanded the treaty in the first place, to use these Pacific Islands as Pacific forward basing locations. These hawks also tend to act as deficit hawks of the worst kind, not looking for solutions to balance the budget, but cutting it in a haphazard way. Essentially they said, you give us something valuable and we will let you come here, but you really get nothing if you come to the U.S. except to escape your island sinking into the ocean because of climate change.

So that's that. It's kind of sad watching this happen. Sadly too, I do not think anyone talks about them in this healthcare debate.

The Beginnings of Redemption?

So today started off grim. I woke up thinking that nothing would happen, and was in a foul mood because the Jewish Calendar had the 9th of Av, which commemorates the destruction of the Temple, and of course, there's a long fast (the only other long fast is Yom Kippur). Ruth Marcus's column this morning made me pine for someone reasonable, and it seemed as the news made it seem like the U.S. would exist in a health care galus (exile, pronounced Ashekenazic, because galut just does not sound right).

Then word this afternoon came out that a deal appeared. Apparently, the Blue Dogs and the Chairman Waxman came to a deal with some minor concessions. One was pushing the vote back until after August. Another served to get negotiating power for the public plan from year one. Finally, they also had some cuts in subsidies and other matters. Ezra Klein nicely summarizes it.

Word also came out too in the same Klein posting of Finance getting closer to a deal. Of course, one staffer reported that they are nowhere near a deal yet, however, I also think part of that is managing pressure and expectations. However, the Senate should start to feel the heat of the House sort of moving along. The Senate's touting of the CBO score and whatnot may have actually helped the House negotiators too. Essentially, something broke the loggerjam.

I still do not know if we will truly see a "beginning of redemption" (it is stated in a Midrash that the Messiah will be born in T'sha B'Av/the 9th of Av), but I am hoping that the seeds of redemption (which would not be complete if we passed the House bill, but rather requires a multi-year retooling) could sprout.

Jon Cohn has another analysis.

Hawaii, Employer Mandates, and Taxing ESI through Premium Excise Taxes

The other day I mentioned about Hawaii's employer mandate. Now I offer a study from the Federal Reserve Bank of San Francisco that states that it probably does not affect employer choices.

Next, there is an article in the Washington Post warning people not to make too much of the taxation of employer sponsored insurance. There are the classic arguments in there that how can something we hate, like going to the doctor, actually lead to runaway costs? The real matter is that it is subsidized, and instead of going in and desiring something just as effective, we want something with all the bells and whistles. Rather than caring about the cost differential, we instead push for the most expensive things or look toward places that are perceived to have higher quality, but just cost more. Boston serves as a great case where community hospitals that are lower cost have just as much quality as the name-brand academic medical centers, but things go there, and since the insurance covers it the same, then too bad.

That said, cost-sharing under a rich comparative effectiveness scheme could help sort of pierce this disconnect. That is, if you want the more expensive service, you have to pay a larger share or some sort of a differential, unless you can meet some burden of necessity. This is just a rambling idea.

Perhaps a better rebuttal to the reporting article is a column by David Leonhardt in the NY Times, stating that ESI is the core of the problem, and is the only real revenue source that grows as health care costs grow.

The fact of the matter is, that at the end of the day, the ESI exclusion of I.R.C. § 105 is just not good. It creates weird distortions.

Now as for ending it, politically the sell is difficult. One route to fixing it is instead of taxing the actual insurance itself is to institute a premium excise tax. Some of the liberal community like this idea, because it targets the hated insurance companies, and stands a chance at passing. Needless to say, one should never discount political arguments.

However, ever the tax person, I worry first that it does get passed onto people, just indirectly. First off, it is regressive. Even if you have a large exclusion, as the reports indicate, everything is at a flat rate above it. This is a two-bracket system rather than the I.R.C.'s structure of 4 brackets. There is nothing to say then that the costs could not just pass through to consumers evenly throughout the insurance group, leading to something regressive.

Of course, this could act as the old Pete Stark statement about a regressive tax for progressive ends, which health reform would serve. However, I have another concern about the administrability of such a proposal. Has anyone thought again about the valuation matters here? How do you determine which plans are worth that much? Since it is an excise tax, perhaps valuation is less of an issue, however, you have to ask how the IRS would collect such data as to how much tax to charge a company in this regard. Again, you have the IRS implementing something that could have administrability challenges, but unlike caps on ESI straight-forward are actually regressive.

A great analysis of the equity portion of this proposal comes from Len Burman at the Tax Policy Center.

Michael Steinberg's Passing

I got word reading Alex Ross's blog that Michael Steinberg passed away over the weekend.

Steinberg's program notes continued to appear in the programs of the Boston Symphony Orchestra (BSO) for many years after he left this venerable town. He had the skills that I envied: the ability to write for a generalist audience at a very high level about music. He remained connected to the musical world throughout his life, always seeking to educate people about the joy of listening. I purchased his program notes on Symphonies, Concerti, and Choral Masterworks in book form, and have always found them handy when I listen.

The L.A. Times has a great remembrance of a truly remarkable writer and music world inhabitant.

Blue Dog Problem

The real question on some of the blogs is how much of a problem are the Blue Dogs. Jon Cohn seems to think that while they pose some complexity, they are not a problem. Should Pelosi decide to move forward she can do so easily.

Joanne Kenan subscribes to the advice of Al Hunt, saying what previous posts here and other bloggers like Nate Silver, Ezra Klein, Cohn himself, and Yglesias have all said, in some sense the Blue Dogs are running against the prevailing wind.

What is most interesting is that Kenan does seem to think too that this could lead to a better bill. Undoubtedly so. The Blue Dog "resistance" while annoying to me, has led toward including something regarding an independent commission with binding recommendations on Medicare payment policy. Such ideas that they put forward in this regard may actually help us bend the curve, and may actually give the President what he wants.

In the end, the Blue Dogs, while not someone you want to get too angry, may be more bark than bite. What may need to happen again is to see some signs of life out of the Senate. Should they have a complete inability to do things, Pelosi may decide not to anger them further and force them into a tough vote. Then again the results of not pushing forward could have disastrous outcomes for the party, and those Blue Dogs in particular.

Morality Play

Religion seems to get involved with health care, and I do not mean abortion. New America Foundation's New Health Dialogue reports that faith-based groups are going out to make the moral case for health reform.

Ezra Klein also points to how the opponents of health reform had in the past avoided morality, but now proponents too seem to avoid the moral issue. We talk instead of the need to cover people and prevent them from getting sick or dying in the terms of cost-benefit analysis, bending the curve, and quality adjusted life years (QALY).

This is not to say that QALY and other matters are not important. However, when it comes to health care we particularly have some problems addressing our moral problems. Perhaps it is a sense of system justification. We avoid talking about the moral failure of people who are uninsured or driven to bankruptcy because of underinsurance because we would rather think that they "deserved" it when they clearly do not. We feel uncomfortable with such immoral structures that we thus ignore and avoid speaking about it.

In many ways too, our lack of any moral element leads to a strangely stilted discussion, where our budgets become stand ins for morality and the politics that advance that. It is like one famous legal paper said about the death penalty. Once the Court made it a constitutional matter, it left the realm of the moral and became a legal standard. To this day the debate on the death penalty is shrouded in the words of deterrence, effectiveness, constitutionality, and budgets.

Our economic and budgetary outlook often does obscure those matters we do not like to discuss like morality. And, as the American Prospect blog states, cost-benefit analysis (CBA) and CBO scores shroud our political judgments in the cloak of scientific/wonkish objectiveness, when such a matter does not exist. Where are the legal realists when you need them?