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Health Care Reform Lives, Vindicating House Conservatives

March 29, 2017

Consumer Power Report #540

Repealing and replacing Obamacare is back on the menu, days after House Speaker Paul Ryan (R-WI) postponed and then canceled a vote on the American Health Care Act (AHCA), which he had claimed embodied Republicans’ only meaningful chance to replace the Obama-era Affordable Care Act (ACA).

In a press conference following a meeting of House Republicans on March 28, Ryan insisted his party and chamber would “get this right” because “it is just too important” and “Obamacare is doing too much damage to families.”

The announcement vindicates House conservatives, who banked on having other opportunities to replace ACA when they called Ryan’s bluff that AHCA in its current form would be their one and only shot. Now House leadership, instead of punishing members of the conservative and libertarian House Freedom Caucus, finally appears to be giving them a seat at the table:

We all have to reflect on what we could have done better, and this discussion was an honest and very constructive step forward. … We don’t want a government-run health care system. We all agree on these things. So, we’re not going to retreat into our corners or put up dividing lines. Today we broke down many of those dividing lines within our conference. There’s too much at stake to get bogged down in all of that. We’re going to move forward on the things the American people sent us here to do. … It may take a little bit more time, but we are certainly listening, and we are going to get there.

House Majority Leader Kevin McCarthy (R-CA) took the podium after Ryan, reiterating a promise to the American people to repeal and replace Obamacare, insisting the AHCA vote cancelation on March 24 “doesn’t mean we’re not going to get there.” House Majority Whip Steve Scalise (R-LA) said congressional Democrats’ celebration is premature, “because I think we’re closer today to repealing Obamacare than we’ve ever been before.”

What are the chances the House leadership’s display of party unity is just a show? Quite good. From a strictly Machiavellian viewpoint, the GOP leadership has an urgent need to project strength, even if it means deceiving constituents, most of whom don’t hear details beyond “Republicans failed last week,” and especially if it means deceiving Democrats and the mainstream media.

United or not, House Republicans have a faction among them unlikely to be tricked into passing major health care legislation that keeps Obamacare’s regulatory structure. As I wrote at The Washington Examiner with Justin Haskins, executive editor at The Heartland Institute, on March 27:

Far from preventing a repeal of Obamacare or stifling what Ryan had called significant health care reform, House conservatives just wrote their ticket for enacting true free-market reforms in the future. … When the Freedom Caucus wants to bring better health care reform legislation to the floor, Ryan will have to let them, or he’ll risk getting stalled again and hold up Trump’s other agenda items.

The House Freedom Caucus has demonstrated considerable savvy, and GOP leadership confirmed this by repeating promises to pass health care reform conservatives can agree with, even if meanwhile Trump and Congress move on to tax reform.

Republican strategist David Payne says the House leadership’s failure to deliver AHCA could motivate Trump to ally with Democrats: “[I]f a trend develops, the caucus might push Trump into the arms of moderate Democrats willing to pull bills to the left in exchange for passage,” Payne told Fox News on March 27.

It’s possible – even probable – Trump will curry favor with Democrats to run the table with big spending initiatives. But this will only confirm Trump had always planned to spend big anyway, and certainly with Democratic crossover. It’s doubtful a tycoon like Trump would decide on a massive spending spree spontaneously, even as retribution or to save face. Surely Trump’s overtures toward big defense, infrastructure, and a wall along the United States/Mexico border suggest the president set his sights on big spending long ago, regardless of how well Obamacare repeal and replacement would fare.

If (or more likely, when) Trump courts Democrats for votes, the mainstream media will spin it as Trump seeking more rational partners than the libertarian and conservative members of the House Freedom Caucus who held up the repeal and replacement of Obamacare. Let them spin. It won’t change the fact, as Haskins and I stated in The Washington Examiner, the “ill-fated American Health Care Act flamed out over Washington, DC, on Friday, a city whose ‘rendezvous with destiny’ is, it turns out, controlled by conservatives” – at least a little more than everyone thought.

– Michael T. Hamilton is a Heartland Institute research fellow and managing editor of Health Care News, author of the weekly Consumer Power Report, and host of the Health Care News Podcast.


IN THIS ISSUE:


RYANCARE FAILED BECAUSE PAUL RYAN IS STILL LEARNING HOW TO GOVERN

House Speaker Paul Ryan, in his press conference following the demise of his bill to replace Obamacare, blamed Republicans who had failed to grasp that the GOP was now a “governing party.” But it’s more accurate to say that it’s Paul Ryan who is not yet accustomed to the art of governing.

“We were a 10-year opposition party, where being against things was easy to do,” said Ryan in a post-mortem press conference. “You just had to be against it. Now, in three months’ time, we tried to go to a governing party where we actually had to get 216 people to agree with each other on how we do things.” It was, he said, “the growing pains of government.”

It’s worth comparing the path of the American Health Care Act with its predecessor, the Patient Protection and Affordable Care Act.

In 2008, the three main Democratic contenders for President – Hillary Clinton, John Edwards, and Barack Obama – put out detailed proposals to expand coverage to the uninsured. They even held a debate during the primaries in which health care was the sole topic.

Immediately after the election, then-Sen. Max Baucus (D., Mont.), Chairman of the Senate Finance Committee, published a 98-page white paper entitled “Call to Action: Health Reform 2009” which detailed his idea to expand coverage to the uninsured by reforming the tax exclusion for employer-sponsored coverage. Baucus didn’t claim that he spoke for anyone else but himself, but he saw his manifesto as a starting point for negotiations with his colleagues.

Thanks to the 2008 financial crisis, Democrats in 2009 controlled 59 – and eventually, 60 – seats in the U.S. Senate, along with large majorities in the House. Nonetheless, Sen. Baucus spent the bulk of 2009 trying to hash out a bipartisan deal on health reform with his Republican colleagues on the Senate Finance Committee.

A deal failed to materialize, and Democrats decided to proceed to pass what we now know of as Obamacare on a party-line vote. Republicans – none more famously than Paul Ryan in February 2010 at Blair House – blasted the Democratic process as partisan, reckless, and gimmicky. …

In comparison to Republican efforts to repeal and replace Obamacare in 2017, the year leading up to the passage of the Affordable Care Act seems like the gold standard of thoughtful and considered governance. …

Sure, Republican politicians talked a good game about replacing Obamacare, because they knew that swing voters and media tastemakers would be uncomfortable with leaving the uninsured in the cold. But Paul Ryan and other GOP leaders never made an affirmative moral case as to why the federal government should strive to help the uninsured. …

SOURCE: Avik Roy, Forbes


KANSAS LEGISLATURE VOTES TO EXPAND MEDICAID AS OTHER STATES EYE SIMILAR MOVES

The legislature of Kansas – a red state where President Donald Trump beat Hillary Clinton by 20 percentage points – has voted to expand its Medicaid program under a key provision of Obamacare.

The 25 to 14 vote in the Kansas Senate on Tuesday comes a week after the state House passed Medicaid expansion, which would allow nearly all poor adults to receive health-care coverage under that joint state-federal program.

But lawmakers don’t have enough votes as of now to overcome an expected veto of the measure from Gov. Sam Brownback, a Republican.

“To expand Obamacare when the program is in a death spiral is not responsible policy,” Melika Willoughby, Brownback’s spokeswoman has said.

However, the Kansas legislature’s move is striking, and just the latest in a series of steps by states to expand or change their Medicaid programs on the heels of a failed effort by GOP leaders in the U.S. House of Representatives last week to repeal and replace key parts of Obamacare.

In Maine, where Republican Gov. Paul LePage has vetoed Medicaid expansion efforts by the state legislature, voters are set to cast ballots next fall on a referendum that would authorize expansion.

On Monday, Virginia’s Democratic Governor Terry McAuliffe proposed amending language in the state budget to authorize him to move toward Medicaid expansion, which has been opposed by the Republican-led General Assembly.

Also Monday, Georgia’s Republican Governor Nathan Deal said he is looking into making changes to the state’s Medicaid program “as long as mandates under the basic Obamacare legislation remain in place.”

Obamacare requires most Americans to have some form of health coverage or pay a fine. But the law only provides subsidies to help buy private health plans to people who earn 100 percent to 400 percent of the federal poverty.

People who earned below 138 percent of poverty were originally supposed to be made eligible for Medicaid under Obamacare, with the federal government picking up the bill for nearly all the costs of insurance the newly eligible.

But a Supreme Court decision made expansion optional for the states. As a result, in non-expansion states there are millions of people who earn too little to get Obamacare subsidies for private plans, but either earn too much for their state’s Medicaid program or are not eligible because they don’t have dependent children.

When Trump took office in January, 19 states had still refused to expand Medicaid. …

SOURCE: Dan Mangan, CNBC


WALLETHUB RANKS BEST AND WORST STATES FOR DOCTORS IN 2017

With National Doctor’s Day around the corner, the personal-finance website WalletHub today released its report on 2017’s Best & Worst States for Doctors.

To identify the best states for those in the business of saving lives, WalletHub’s analysts compared the 50 states and the District of Columbia across 14 key metrics. The data set ranges from average annual wage of physicians to hospitals per capita to quality of public hospital system. …

Nebraska has the highest average annual wage for surgeons (adjusted for cost of living), $307,590, which is 2.5 times higher than in the District of Columbia, registering the lowest at $121,139.

Idaho has the lowest number of physicians per 1,000 residents, 0.72, which is 10 times lower than in the District of Columbia, registering the highest at 7.23.

Florida has the highest projected share of the population aged 65 and older by 2030, 27.1 percent, which is 2.1 times higher than in Utah, registering the lowest at 13.2 percent.

South Carolina has the lowest number of serious disciplinary actions taken by the state medical board per 1,000 physicians, 1.33, which is 5.1 times lower than in Wyoming, registering the highest at 6.79.

North Dakota has the lowest amount of malpractice award payouts per capita, $1.03, which is 35.1 times lower than in New York, registering the highest at $36.15.

Wisconsin has the lowest annual malpractice liability insurance rate, $6,699, which is 6.1 times lower than in New York, registering the highest at $40,826. …

SOURCE: John S. Kiernan, WalletHub


‘NOMAD’ OFFERS UBER-LIKE HIGH-TECH HELP TO THE FREELANCE PHYSICIAN

… Alexi Nazem, a 34-year-old physician-turned-entrepreneur, has some ideas about how to bring American medicine out of the fax-and-landline age and into the 21st century. “Our goal is to be the Airbnb of health care,” he says of Nomad, the startup he co-founded and now leads as CEO. That oversells it a bit: Whereas Airbnb connects ordinary lodgers with spare rooms, Nomad is a business-to-business proposition. It does, however, bring doctors into the gig economy.

That could help attenuate a pending shortage of physicians. Residency positions at hospitals aren’t increasing nearly fast enough to meet the growing demand for services as baby boomers age and senior doctors retire. By 2025, the U.S. will be short between 61,700 and 94,700 doctors, according to the Association of American Medical Colleges. In 2014 there were 782,210 active physicians under 75, a mere 2% increase from the prior year.

But one area of medicine is expanding rapidly: freelance work. Some 50,000 doctors perform locum tenens jobs – Latin for “placeholder” – and Mr. Nazem says the market is growing 6% a year. More than 90% of U.S. hospitals hire locums, sometimes as a prelude to full-time work. “Locum tenens is often a way to ‘try before you buy,’ “ Dr. Nazem says. …

Locum work allows physicians to travel. They can visit their elderly parents or adult children in another part of the country, working temporarily there while creating a short-term vacancy for a locum back home. The growth in this model, Dr. Nazem adds, reflects “a larger trend in the general economy of more people wanting to do freelance work,” as well as doctors’ frustrations with the “challenges of working in the existing bureaucracy.”

Thus the problem Nomad has made a business of solving. Doctors turn to locum work to escape bureaucratic dysfunction, but to do so they’ve had to sign up with “brokers”-middlemen who introduce new burdens. Dr. Nazem describes his own exasperating experience applying for locum side gigs while employed at New York Presbyterian Hospital.

One of them involved filling out a 94-page paper application and mailing it to a broker. …

Once it took him 10 months to book a three-day job, which he says is not atypical. Another time, after traveling two hours for a job interview, he was stood up – and because his only contact was the broker, he had no way of reaching the hospital. …

Adding injury to insult, brokers charge hefty commissions, typically between 30% to 40%, though it’s hard to know. “Contractually neither the doctor nor the hospital are allowed to tell each other what they are being paid,” Dr. Nazem says. “The flow of funds is hospital to broker to doctor. So a hospital will say, ‘I want to hire an emergency-room physician for a month,’ and they go to a broker and ask, ‘Can you help me find that person?’ In this middle part when the broker is handling the funds, there is zero transparency.”

Nomad provides that transparency. Its website connects locums with clinics for a flat 15% fee. …

“Why would you put any roadblocks to allowing doctors to move easily around the country to places where they are needed?” he asks. …

SOURCE: Allysia Finley, The Wall Street Journal

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Health Care
Author
Michael Hamilton is a Heartland research fellow and managing editor of Health Care News. Michael writes and edits at the intersection of liberty, language, and learning.
mhamilton@heartland.org

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