U.S. healthcare & Obama's concessions

The current U.S. system is expensive and inefficient.

[T]he incredible cost of US health care is breath-taking, whether you're a reformer or anti-reformist. The US spent some $2.2 trillion (£1.34 trillion) on healthcare in 2007. It is a mind-boggling number which amounts to over 16% of US GDP. That is nearly twice the average spent by other rich nations with advanced health systems - yet you have to wonder if this is value for money when, by most measures, the US is a less healthy nation than other rich countries, on everything from infant mortality to longevity.

The U.S. healthcare system needs reforming. Cue Barrack Obama, one time advocate of single payer healthcare system.

As Paul Krugman writes, the single payer healthcare system would be the best option for reform.

True “socialized medicine” would undoubtedly cost less, and a straightforward extension of Medicare-type coverage to all Americans would probably be cheaper than a Swiss-style system.

The evidence makes interesting reading.*

Despite his previous endorsement of single payer healthcare, Obama repositioned himself in opposition to single-payer healthcare during the presidential candidacy campaign. His new proposition was for a public option to compete with private insurers.

Since the presidential election, Obama has constantly made concessions. In March 2009, Obama talked about the importance of being pragmatic

Each of us must accept that none of us will get everything that we want, and that no proposal for reform will be perfect. If that's the measure, we will never get anything done.

This was an exceptional piece of positioning; he presented himself as being open-minded and pragmatic whilst simultaneously ruling out a single payer solution. Since then, Obama has gone even further to placate those in opposition to significant healthcare reform, Obama recently said:

[T]he public option, whether we have it or we don't have it, is not the entirety of health care reform. This is just one sliver of it, one aspect of it. And by the way, it's both the right and the left that have become so fixated on this that they forget everything else.

Obama's change of discourse suggests that the competing public option proposal is now off the table. In a generous light, the initial change of stance could be viewed as born of the ugly reality of electoral politics rather than unprincipled toadying. If Obama makes this latest concession, which he seems willing to make, there can be no such generosity. In three moves Obama's stance on healthcare has changed from seemingly principled, to apparent pragmatism, to sell-out.

In the light of Obama making concession after concession, will the considerably watered down healthcare reform package pass?

At this point, all that stands in the way of universal health care in America are the greed of the medical-industrial complex, the lies of the right-wing propaganda machine, and the gullibility of voters who believe those lies.

Oh dear ... The lessons of Clinton healthcare plan of 1993 teaches us that this is a formidable opposition.

During the Clinton administration, support for completely rebuilding the health care system peaked in the spring of 1993 [55%] and declined subsequently. By June 1994, just 37% said the health care system needed to be completely rebuilt.

This does not mean that the opposition to healthcare reform is insurmountable. Healthcare reform has popular support. As Chomsky notes in Failed States, the majority of Americans recognise that their healthcare system needs reforming.

"An NBC-Wall Street Journal poll found that ‘over 2/3 of all Americans thought the government should guarantee everyone the best and most advanced health care that technology can supply'; a Washington Post-ABC News poll found that 80 percent regard universal health care as ‘more important than holding down taxes'; polls reported in Business Week found that ‘67 percent of Americans think it is a good idea to guarantee health care for all U.S. citizens, as Canada and Britain do, with just 27 percent dissenting'."

Regardless of the fact the U.S. polity is contradicting the will of the majority, the question is whether a reform so far removed from perfect is worth 'getting done' at all?

On the one hand, the reform itself is to be welcomed for improving America's healthcare system by potentially providing universal healthcare. The proposed healthcare reforms will make U.S healthcare more like the Swiss healthcare system, which primarily provides universal coverage through regulation and subsidy.

On the other hand, whilst the Swiss system provides good care, it is expensive. The only reason that the Swiss-style system is an improvement is that the status-quo is so inefficient and iniquitous. Obama has thrown away the opportunity to implement a progressive government-run healthcare system that would benefit more Americans significantly more so than this fudge. (Even his seemingly discarded proposal of 'competitive public option' system would be preferable).

With his endless concessions, Obama may have bought the votes of the odd 'blue dog', but by and large, the latest proposal continues to face the same opposition that a proposal for a single payer healthcare system would have faced. America needs Obama to be the strong and principled leader he portrays himself to be. America needs a president that ignores manufactured opposition, listens to the right-minded, and defends the interests of the people he serves. What America has is flaccid corporatist**.

*UK citizens might be interested to note that the NHS is comparatively cheap and efficient. In contrast to the current U.S system, it provides better care on almost every measure and costs around 40% as much per person. Although, when considering healthcare provision, it is important to bear in mind more than the degree of privatisation and amount of expenditure. Policy priorities significantly influence results. For instance, Cuba's universal healthcare includes preventive health care provision. Japan's citizens have healthy lifestyles. In both of these considerations the U.S. lags behind, which makes U.S. healthcare very inefficient in terms of expenditure versus life expectancy. A point well made by Chris Dillow at Stumbling and Mumbling. The American system is also hugely wasteful in term of 'over-treating' the elderly. (Of course, the argument could always be made that such factors are economically determined, but I digress).

** The link is to an excellent (but very long) article by Paul Street about Obama. As it is on Znet, you may have to register to view it.

Update

I might try to re-write this and offer it as a new post in the future, because, in attempting to pre-emptively defend my argument, it has become diffuse. The latest article by Paul Krugman reiterates some of the arguments contained above in a clearer manner.

[T]here’s a point at which realism shades over into weakness, and progressives increasingly feel that the administration is on the wrong side of that line. It seems as if there is nothing Republicans can do that will draw an administration rebuke: Senator Charles E. Grassley feeds the death panel smear, warning that reform will “pull the plug on grandma,” and two days later the White House declares that it’s still committed to working with him.

It’s hard to avoid the sense that Mr. Obama has wasted months trying to appease people who can’t be appeased, and who take every concession as a sign that he can be rolled. [...]

[T]he supposed alternative, nonprofit co-ops, is a sham. That’s not just my opinion; it’s what the market says: stocks of health insurance companies soared on news that the Gang of Six senators trying to negotiate a bipartisan approach to health reform were dropping the public plan. Clearly, investors believe that co-ops would offer little real competition to private insurers.

Also, and importantly, the public option offered a way to reconcile differing views among Democrats. Until the idea of the public option came along, a significant faction within the party rejected anything short of true single-payer, Medicare-for-all reform, viewing anything less as perpetuating the flaws of our current system. The public option, which would force insurance companies to prove their usefulness or fade away, settled some of those qualms. [...]

So progressives are now in revolt. Mr. Obama took their trust for granted, and in the process lost it. And now he needs to win it back.

Basically, Obama should take a leaf out of Barney Frank’s book.

Labour & press relations

Andrew Neil’s blog, which on the main criticised what he saw as Darling’s optimistic economic forecasting, made an interesting point about media relations.

One thing is clear to me: this Budget may or may not mark the end of New Labour but it certainly marks the end of the Murdoch newspapers' dalliance with New Labour.

If this is the case, which I suspect it is, then this surely is the end of the Labour government’s reign. The papers’ response to the budget suggests so too.

One thing stands in Brown’s favour, the declining circulation of Murdoch’s papers. Although by even mentioning that I feel that I have overstated the case. Although the might of Murdoch’s press empire might not be what it once was, his influence is still immense.

Andrew Neil on the 50% income tax rate for higher earners

Andrew Neil on the 50% income tax rate for higher earners - 'Worse than we feared?'

The independent Institute of Fiscal Studies uses a more dynamic model which rightly assumes some high earners won't (for example, they might leave the country, stop working or pay themselves anything above £150,000 in tax-free pension contributions). It recently concluded that the proposed 45% would not bring in ANY extra revenue and indeed might actually generate less. We will wait with interest to see what it makes of the new 50% rate.

Threats that high earners will leave the country are often dismissed as propaganda and no doubt they often are. But a 50% top rate of income tax means Britain will have the third highest top rate in the industrialised world -- only Sweden (55%), Denmark (59%) and Netherlands (52%) will be higher while America (35%), Canada (29%), Hong Kong (16%) and Dubai (0%) could start to look even more tempting to Britain's high fliers, especially now the streets of the City are no longer paved with gold and there are mumbles among them that the Budget of 2009 represents the end of New Labour.

Good riddance to bad rubbish, you might say, and if we see the back of some of the bankers who've brought us to our knees you might be right. But the top 5% of income tax payers account for half of all income tax receipts. You don't want to lose too many of them when you're already planning to borrow £800 billion.