Wonkbook: Artificial hips and a disjointed medical system

August 5, 2013

Welcome to Wonkbook, Ezra Klein and Evan Soltas's morning policy news primer. (Well, usually Ezra and Evan's. But Ezra is traveling today, so it's just Evan.) To subscribe by e-mail, click here. Send comments, criticism, or ideas to Wonkbook at Gmail dot com. To read more by Ezra and his team, go to Wonkblog.


(Photo by Michael McCloskey/iStockphoto)

Wonkbook's Number of the Day: $13,660. That's the cost of a hip replacement in Belgium. In the US, it'd run you several times that amount.

Wonkbook's Chart of the Day Health-insurance premiums by state and provider.

Wonkbook's Top 5 Stories: 1) artificial hips and the disjointed medical system; 2) how to play 'debt chicken'; 3) the state of hope on immigration reform; 4) who in the government has your data?; and 5) Congress goes into recess.

1) Top story: If hips are a fortune, what does a working medical system cost?

In need of a hip, but priced out of the US. "As the United States struggles to rein in its growing $2.7 trillion health care bill, the cost of medical devices like joint implants, pacemakers and artificial urinary valves offers a cautionary tale. Like many medical products or procedures, they cost far more in the United States than in many other developed countries. Makers of artificial implants — the biggest single cost of most joint replacement surgeries — have proved particularly adept at commanding inflated prices, according to health economists. Multiple intermediaries then mark up the charges." Elisabeth Rosenthal in The New York Times.

@ReformedBroker: Healthcare leads the S&P 500 this year with a 27% gain. People who still call it a "defensive" sector don't understand demographics

Republican leaders signal defunding Obamacare isn't in play on the budget. "Many rank-and-file Republicans have pledged to block any bill funding the government for the fiscal year that starts Oct. 1 if it includes funds to implement the health-care law. GOP leaders, however, have appeared wary of using the health-care legislation as a negotiating tool as Washington nears another fiscal crisis." Kristina Peterson in The Wall Street Journal.

Extremely helpful explainer: Health-insurance premiums by state and providerPhil Galewitz in Kaiser Health News.

So you've burned your Obamacare draft card... "The Affordable Care Act has an open enrollment period, which is the time frame when Americans can enroll in health plans on the marketplace. The whole point of this feature is to prevent people from signing up for coverage en route to the hospital. The open enrollment period, for 2014, runs from October 1 until March 31. There are also special enrollment periods to accommodate those who have a major change in life circumstances. If a mother gives birth to a baby, for example, the child can enroll in coverage outside the open enrollment period. If the subscriber has a significant change in income, he or she will also be able to switch to a different (potentially more affordable) health plan." Sarah Kliff in The Washington Post.

The big lie goes after Obamacare. "This campaign would be amusing, if it didn't stand a significant chance of actually persuading people to sacrifice their own health and finances for somebody else's political cause. An April poll found that 42 percent of Americans didn't know that Obamacare was still law, and even doctors don't understand how the exchanges will work. Those seeking to mislead Americans about what Obamacare means for them are looking at a promising landscape." Christopher Flavelle in Bloomberg.

Healthcare law raises pressure on public employees' unions. "Cities and towns across the country are pushing municipal unions to accept cheaper health benefits in anticipation of a component of the Affordable Care Act that will tax expensive plans starting in 2018. The so-called Cadillac tax was inserted into the Affordable Care Act at the advice of economists who argued that expensive health insurance with the employee bearing little cost made people insensitive to the cost of care. In public employment, though, where benefits are arrived at through bargaining with powerful unions, switching to cheaper plans will not be easy." Kate Taylor in The New York Times.

FRANK: For Obamacare to work, everybody must be in. "Two beliefs continue to shape debate on Obamacare. First, pre-existing medical conditions shouldn’t prevent people from obtaining affordable health insurance. And second, people who don’t want health insurance shouldn’t be forced by the government to purchase it. These may seem to be reasonable positions. But they are incompatible. That’s been shown by historical events, and it’s now being strikingly confirmed by recent experience in the emerging Obamacare insurance exchanges. The crux of the matter is what economists call the adverse-selection problem." Robert H. Frank in The New York Times.

Music recommendations interlude: "Mercy Mercy Me."

Top opinion

PUTNAM: Crumbling American dreams. "My hometown — Port Clinton, Ohio, population 6,050 — was in the 1950s a passable embodiment of the American dream, a place that offered decent opportunity for the children of bankers and factory workers alike. But a half-century later, wealthy kids park BMW convertibles in the Port Clinton High School lot next to decrepit “junkers” in which homeless classmates live. The American dream has morphed into a split-screen American nightmare. And the story of this small town, and the divergent destinies of its children, turns out to be sadly representative of America." Robert D. Putnam in The New York Times.

FRIEDMAN: Risk, the most important issue in American politics. "Just how Americans are supposed to face the personal risks that life inevitably entails has become the dominant political issue of our time. The chief domestic policy issue in last fall’s presidential election was medical risk: whether to require all citizens to carry health-care insurance; and if so, who should provide it; and above all, how to pay for it. The risks inherent in old age and the anxieties about Social Security and Medicare, the government’s two most important programs for helping citizens to manage them, are sure to drive the debate in at least the next few elections." Benjamin M. Friedman in The New Republic.

CHAIT: Can Republicans be economic populists? "The Republican postelection ideological repositioning project has chugged along fitfully and without satisfaction until just recently, when a solution struck with the blinding force of revelation. The concept is to define the Republican Party as the populist opposition to the Obama administration. Obama, goes this line of reasoning, is not the advocate of the people he puts himself forward as but the defender of bien-pensant elites. Republicans are — or should be — the party of stripping the elites of their government favors." Jonathan Chait in New York Magazine.

KRUGMAN: Republicans against reality. "The sad truth is that the modern G.O.P. is lost in fantasy, unable to participate in actual governing. Just to be clear, I’m not talking about policy substance. I may believe that Republicans have their priorities all wrong, but that’s not the issue here. Instead, I’m talking about their apparent inability to accept very basic reality constraints, like the fact that you can’t cut overall spending without cutting spending on particular programs, or the fact that voting to repeal legislation doesn’t change the law when the other party controls the Senate and the White House." Paul Krugman in The New York Times.

HAMILTON: Why Yellen should lead the Fed. "As someone who has known Ms Yellen since her days as a professor at Berkeley, I have some thoughts about how she does it. She has a very impressive intellect but does not feel a need to show it off. Instead, she has an amazing knack for always asking the right questions. If someone disagrees with her, her first instinct is to try to understand why they have reached a conclusion different from her own. For this reason, Ms Yellen is one of the people I would most trust to find out what the key problems are and what needs to be done in any new situation." James D. Hamilton in The Financial Times.

SANGER: What's 'top secret'? "When far too much information gets classified, nothing is really classified. Respect for the system erodes when information readily available in open sources is ostensibly guarded with high-level classification...[T]he Pentagon and intelligence agencies should be given a budget, and every time a “top secret” stamp is used, it should be charged against that budget." David E. Sanger in The New York Times.

Environmental interlude: Is climate sensitivity less than 2 deg. C?

2) Who sits on whose shoulders in debt chicken?

Here comes another round of debt chicken. "The probability is that any budget deadlock, which could force a government shutdown and action on the much-discredited across-the-board sequestration cuts in defense and nondefense discretionary spending, will be postponed beyond the Oct. 1 deadline. Then, everything, perhaps including any tax reform initiative, will be thrown in with the debt-ceiling increase sometime in November." Albert R. Hunt in Bloomberg.

Elastic numbers make it hard to get a handle on the economy. "[H]ow weak is the economy? The numbers don’t appear to fit a coherent pattern. Even with the downward revisions in the labor figures, the current level of job creation is greater than would typically be expected from a weak economy. The lackluster G.D.P. picture is hard to reconcile with the decline in the unemployment rate we’ve been seeing...G.D.P., for example, depends heavily on sales receipts, while G.D.I. relies on data from paychecks, which are often issued well after sales are made, said J. Steven Landefeld, director of the bureau. “G.D.I. and G.D.P. are both the bureau’s children,” he said. “We’re proud of both, and we know they’re different.”" Jeff Sommer in The New York Times.

What you can learn from the new science of smarter spending. "[P]eople who move to new homes do not show even small increases in overall happiness. Harvard students care a lot about getting into the most beautiful and well-located of Harvard’s houses, but the evidence suggests that the students’ happiness is utterly unaffected by where they end up. By contrast, trips, movies, and sporting events can have a real impact on people’s subjective experience." Cass R. Sunstein in The New Republic.

Can Larry Summers play nice with other financial regulators? "The last two weeks have seen a flurry of commentary on the relative merits of Larry Summers and Janet Yellen as potential candidates for the next chair of the Federal Reserve. Some of the criticism about Larry Summers comes from his role in 1990s deregulation of finance. His fight with Brooksley Born of the CFTC over the regulation of derivatives particularly stands out. People already have strong opinions about Summers’ culpability for the financial crisis as a result of his past support of deregulation. But what goes missing is the extent to which he sought to control and undermine an independent regulator given that he disagreed with them." Mike Konczal in The Washington Post.

What did the nation get for $800B in Fed bond-buying? "“Data are quite mixed on whether we’ve seen an expansion of lending,” said Catherine L. Mann, Rosenberg professor of global finance at Brandeis. Lending has increased for cars and commercial property, she says, but not for small business. New mortgage origination for housing remains weak. Meanwhile, the Fed’s outsize presence in the markets for Treasuries and mortgage-backed securities may have changed those markets in ways no one can predict." Anna Bernasek in The New York Times.

And you thought you had seen it all interlude: The ur-movie trailer.

3) Hope or no hope for immigration reform

Republicans offer little hope for comprehensive immigration bill. "House Republican leaders on Sunday showed no signs that their party would accept the Senate’s bill to overhaul the nation’s immigration laws, instead suggesting that they want to address the issues one by one...Ryan also insisted that border-enforcement legislation should come first. He added that his party opposes amnesty for undocumented immigrants and wants to instead give such individuals a chance to “get right with the law.”" Josh Hicks in The Washington Post.

Immigration idea offers room for compromise. "Rep. Bob Goodlatte (R., Va.), the conservative chairman of the House Judiciary Committee, has floated an idea that would rely partly on existing law to allow many people here illegally to gain citizenship. People in both parties say it has the potential to win backing from some Republican House members who say those here illegally shouldn't get special treatment unavailable to other foreigners. Under Mr. Goodlatte's concept, Congress could grant illegal immigrants a provisional legal status, similar to the probationary legal status available under legislation that cleared the Senate in June. Then they could use existing laws that allows foreigners who are legally in the U.S. to seek green cards—also known as permanent legal residency—and eventual citizenship if they meet strict criteria. Illegal immigrants are barred from doing so." Laura Meckler and Kristina Peterson in The Wall Street Journal.

Internet interlude: The good, bad, and ugly of email.

4) Your data is not just the NSA's anymore 

Other agencies clamor for NSA's data. "The National Security Agency’s dominant role as the nation’s spy warehouse has spurred frequent tensions and turf fights with other federal intelligence agencies that want to use its surveillance tools for their own investigations...Smaller intelligence units within the Drug Enforcement Administration, the Secret Service, the Pentagon and the Department of Homeland Security have sometimes been given access to the security agency’s surveillance tools for particular cases, intelligence officials say." Eric Lichtblau and and Michael S. Schmidt in The New York Times.

Members of Congress denied basic info about NSA programs. "Members of Congress have been repeatedly thwarted when attempting to learn basic information about the National Security Agency (NSA) and the secret FISA court which authorizes its activities, documents provided by two House members demonstrate. From the beginning of the NSA controversy, the agency's defenders have insisted that Congress is aware of the disclosed programs and exercises robust supervision over them." Glenn Greenwald in The Guardian.

Supreme Court may decide how private a cellphone is. "Now, amid a national debate over how much the government should be able to find out about the private activities of its citizens in the name of combating terrorism, the next issue seems teed up for Supreme Court review: Cellphones." Robert Barnes in The Washington Post.

Wise words interlude: ‘What I regret most in my life are failures of kindness.'

5) Recess!

As Congress flees, what have we learned about it and its denizens? "John Boehner is a SINO (Speaker In Name Only): From nearly being pushed to a second ballot in the vote for speaker at the start of this Congress to the failure of the farm bill in June, there are signs everywhere that the Ohio Republican has been tasked with leading a Republican conference that has no interest in being led." Chris Cillizza in The Washington Post.

August recess now high season for interests lobbying lawmakers. "Once a lull in the political calendar, August is now officially part of the high season. An array of interest groups has methodically plotted how to use the congressional recess to press causes. The sophisticated operations aim to drive a political narrative throughout the month, hoping to produce a strong display of voter sentiment that lawmakers will not be able to ignore when they return to Washington after Labor Day. At that point, they will immediately contend with a showdown over the budget, a House debate on immigration reform and the launch of new state health insurance marketplaces created by the Affordable Care Act." Matea Gold in The Washington Post.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

Internet killed the dieting star: Why Weight Watchers is flounderingLydia DePillis.

Obama is wrong. Traditional journalism isn’t deadDanny Hayes.

So you’ve burned your Obamacare draft card... Sarah Kliff.

Obama is wrong. Traditional journalism isn’t deadDanny Hayes.

Can Larry Summers play nice with other financial regulators? Mike Konczal.

George Saunders: ‘What I regret most in my life are failures of kindness.’ Ezra Klein.

Et Cetera

Judges extend Supreme Court same-sex rulingAshby Jones in The Wall Street Journal.

Senate map favors Republicans in 2014Patrick O'Connor in The Wall Street Journal.

Got tips, additions, or comments? E-mail me.

Wonkbook is produced with help from Michelle Williams.

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Lydia DePillis · August 4, 2013