Economy Department with Ezra Klein

Economy Department with Ezra Klein

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Ezra Klein
Washington Post Business Blogger
Thursday, July 2, 2009; 12:00 PM

Ezra Klein writes a Post blog about economic and domestic policy, and he was online July 2 at noon ET to take your questions about collapsing banks, cap and trade, health care reform and pretty much anything else you can attach a chart to.

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Washington, D.C.: Did you know about, or participate in, this? And do you feel that's an appropriate action for a newspaper?

Ezra Klein: Morning, folks. Been a weird day around the office, as you might imagine. But let's talk this out.

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Washington, D.C.: When "the number of uninsured" is referenced, does that generally include people who do not have insurance but who are nevertheless eligible for government health-care programs, such as Medicaid and related state programs (e.g. MediCal in California)? Put another way, should the debate be about "the uninsured" or "those who do not have access to health care" -- or, statistically are those two groups about the same size?

Also, does the reference to the uninsured include undocumented aliens? Thanks.

Ezra Klein: The uninsured is, simply put, people without insurance. Some of them are eligible for help and don't know it. Some can't afford care. Some don't want to pay the money. But in general, I think the debate should be about the uninsured, not about those without access. If you have access to insurance but don't take it and then get in a car accident, taxpayers end up paying for your treatment. This free rider problem is what an individual mandate is meant to address.

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Ezra Klein: Washington, D.C.: Did you know about, or participate in, this? And do you feel that's an appropriate action for a newspaper?

No. No. And no. I was genuinely appalled when I read that this morning. From every angle, it's dirty: It compromises us with the government officials we should be covering but who are doing us a financial favor by participating. It compromises us with the lobbyists we should be covering but who are now funding our business in return for access to the newsroom and the administration. There's literally no way to look at it that doesn't leave us in a terribly unethical position.

And I don't imagine there is anyone in the newsroom who disagrees with that. Reporters are pretty religious about this stuff. The story seems to be that someone on the business side got ahead of themselves and the idea was shot down by Marcus this morning. I'm glad of that.

I also want to note that there's a variant of that idea that's very common in Washington: The National Journal frequently holds panel discussions where newsmakers speak with reporters in front of an audience and industry players -- pharmaceutical companies, say -- sponsor the event and get their names on the podium. That's a lot less problematic than literally selling access. But it's still problematic. And it's evidence of how weird things are getting as the old business models break down.

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Staten Island, N.Y.: What are the chances that the new HELP plan will be THE plan that passes Congress and signed by the president.

Ezra Klein: Quite low. For one thing, it's not a full bill: It doesn't have Medicaid or even revenue sources, both things that are under Finance Committee jurisdiction. The plan now is that Finance will build its bill. The two will be combined. And if the House and Senate can both pass some version of health reform, then those bills will be combined.

it's going to be a long summer.

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washingtonpost.com: Editor: Post Newsroom Won't Join Proposed 'Salons'

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Miami: Isn't the short-term effect of an employer mandate to make it more expensive to keep or hire employees? Job numbers suck right now, and it's great that more people will get health coverage, but if those same people end up being laid off, or worse, never hired to begin with.

Ezra Klein: Not really. Most employers over 25 people already offer health insurance. And $750 bucks for full-time employee who you don't give coverage to is, in context of a real salary, very little. I think the real problem with a system built around an employer mandate is that it's still a system built around employers, which means that it's still crazily inefficient and patchwork. What you're basically seeing here is tension between the politics and policy of health reform. The politics say leave what everyone has alone. The policy says change everything because what we have now doesn't work. And the politics are winning.

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Berkeley, Calif.: Hey Ezra, It's Ayelet. Couldn't resist asking this question. Recently I went to the doc for knee and shoulder pain. Filled out reams of forms. He referred me to the PT, to an acupuncturist, and to a massage therapist. More and more piles of the same forms.

By the fourth time I handwrote all my insurance information onto a form I had another RSI injury -- this time in my fingers. So here's my question. There's been a lot of talk about computerizing medical records. They do it successfully at Kaiser, for example. Can we reasonably expect to see one coherent internet-based system of medical record keeping? Or is that a pipe dream.

Ezra Klein: We can certainly "reasonably expect" that. I mean, my god, it's 2009. Google maps can tell me where I left my keys this morning. But my health records are still in a manila folder? My pharmacist still needs to read my doctor's handwriting (do they even sell pens anymore?)? It's insane.

Will it happen quickly? Probably not. The stimulus had a lot of money for health IT. But I've not seen anything that would standardize the system yet, and that's really the key advance: Health recors aren't that useful if they can't be read by different doctor's offices.

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Austin, Tex.: Is the public option in the HELP draft stronger or weaker than the Tri-Committee House draft and why?

Ezra Klein: No, it's a lot weaker. The Tri-Committee draft uses Medicare bargaining rate and the Medicare provider network and is open to everyone through a robust national health insurance exchange. The HELP plan can't partner with Medicare and is in a much weaker health insurance exchange -- CBO predicts that only 27 million people will have access to it by 2019.

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Chicago : Being the "foodie" you are, any recommendations or favorite spots in Chicago? Ever been?

washingtonpost.com: Gut Check

Ezra Klein: I desperately, desperately want to go to Alinea. Hopefully some day! Of restaurants I have visits in Chicago, I love Lula Cafe. One of my favorite restaurants anywhere.

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New York, N.Y.: Do you have a response to Joe Weisenthal's critique of your take on Wal-Mart?

Ezra Klein: It's not really a critique of my position, as he doesn't engage any of my actual points. He's upset because of what an employer mandate will do to smaller employers who don't offer much in the way of health care benefits. He think it's bad that it will penalize them. I don't.

But nor is it the best of all possible world. As always, I await the day a major business lobby or organization puts its weight behind a plan -- like, for instance, the Wyden-Bennett plan -- that gets them out of the health insurance market entirely. Then none of them will have an advantage vis-a-vis the others.

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Berkeley, Calif.: Do you see any Congressional or White House interest in establishing an independent commission to investigate the causes of the financial collapse? After the 1929 crash there was a serious investigation that helped improve the system and it seems like there is a lot that we still don't know about this crash.

Ezra Klein: I've heard this idea come up occasionally but I've not seen it seriously considered. McCain was behind it for awhile. Originally, I thought it just posturing, but I've come around to believing it's a pretty important and good idea.

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Tampa, Fla.: Cost of public option health care plan: $1.2 trillion.

Revenue raised from letting Bush tax cuts expire according to their own terms: $1.8 trillion.

Benefits of public plan: priceless.

Ezra Klein: I've never seen the public plan costed at $1.2 trillion. In fact, I know it hasn't been. The public plan, as far as I or anyone can tell, will be supported entirely by premium payments by individuals. Cost to the government? $0, as far as I know. Cost to the rest of us? Probably negative, as most estimates suggest it will save us money as compared to the private sector premiums we pay now.

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Cambridge, Mass.: The most interesting place I have ever eaten - O Ya in Boston. There are 38 seats and 83 items on the menu. The average person has 6 tiny, but complicated items.

Ezra Klein: I'm going to Boston soon so I'll keep an eye out for that. It sounds like DC's Minibar would be up your alley.

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Richmond, VA: So....considering what is being discussed in health care reform, namely insurance: If what is passed is a version of coverage for everyone, does that mean I can opt out of my employeer (that I also contribute to) plan and just let the government pick up the tab?

Ezra Klein: Nope. First, you'd still have to pay for your health insurance in the exchange. The government doesn't foot your bills. ANd second, the plans under consideration have so-called "firewalls" preventing people with employer-based coverage from buying in.

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Princeton, N.J.: Ever eaten in Fogo de Chao? You can feel your arteries seize up as you enter. Remember, "Nothing succeeds like excess."

Ezra Klein: Nope. And never will. I'm half-Brazilian and visit my family there a lot, so I've been to real churrascarias. And I sort of hate them. It's really too much meat. But then, that's what a semi-vegetarian like myself would say...

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Princeton, N.J.: Many times I have submitted the following question to a Post chat. Never got an answer, but now I know the answer. ----- Here are two statements:

Every other industrialized country has government run health care, mostly single payer and they get better health care as measured by all the bottom line public health statistics at less than half the cost.

Because of the high overhead and enormous physician and patient compliance costs plus high drug prices, we can give everyone a Super Medicare at less cost than we are now paying.

Now these may be false, but you will never see them even mentioned, let alone discussed in the pages of the Post.

Has the newspaper of Graham, Bradlee, Woodword, Bernstein, Ricks and Priest become a wholly owned subsidiary of United Healthcare?

Ezra Klein: No. If United Healthcare owned our business, we'd probably have better cash-flow. Insurance is more profitable than news. But they don't. And I agree with your statements. The problem is no one can find 60 votes in the Senate for single-payer.

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Concord, N.H.: Bernie Sanders articulated something that I have been thinking ... couldn't Nelson, Landrieu and other conservative Dems be persuaded to vote for cloture on (i.e., not filibuster) a health-care bill, even if they vote against it on the up-or-down vote? If not, then having 60 Dems in the Senate is pretty meaningless from a progressive standpoint.

Ezra Klein: I don't know. I'm surprised there's not more of an effort among advocacy groups to secure a consistent attack on the filibuster for Democrats. I'd also add that it wouldn't be some weird partisan move for 60 Democrats to pledge to break all filibusters: That, presumably, is why America elected 60 Democrats to the Senate. And beyond that, if Republicans couldn't count on the filibuster to kill legislation, they might start trying to be part of it instead. A filibuster-less world could be less partisan than the world we live in.

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Philadelphia: "The public plan, as far as I or anyone can tell, will be supported entirely by premium payments by individuals."

Since when? One aspect of the public plan is that it will be where current Medicaid recipients get their health care. Another aspect is that it is expected to be the place where those who are currently uninsured and will require subsidies will be getting their health care.

Ezra Klein: I've not heard of it replacing Medicaid. It definitely doesn't do that in the HELP bill. And so far as subsidies go, the public plan will be one choice among many, most of them private. in other words, the subsidies for the public plan will be no different than the subsidies for private plans.

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Montreal: You have been pushing intensely for universal health care. That is the most important social reform that the Obama administration has been putting forth. Not that I would like to be "civically greedy", but I feel as though education has been left behind. It's a more socially production sector and it is badly in need of resources and reforms.

Lately, Sen. Evan Bayh has revitalized the issue by addressing teachers' wages. However, the issue goes far beyond salaries, I think that efficient education should occupy the same place as universal health care.

My question: how likely do you think that Sen. Bayh's reforms will be heard and used? What is your take on the current role and conditions of education? Where do you think it fits within the reforms (if it does in your opinion)?

Ezra Klein: Hard to say. I haven't heard much on Evan Bayh's plan. one of the big problems here is that the federal government actually doesn't have much power over education. It's most funded and controlled at the state and local levels.

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Washington, DC: Which conservative bloggers/writers do you read regularly? Which would you recommend to someone looking for a good representation of the other side of the domestic public policy discussion?

Ezra Klein: Tyler Cowen and Alex Tabarrok at Marginal Revolution. Andy Samwick at Capital Gains and Games. Megan McArdle at the Atlantic. The crew over at Atlantic Business. Ramesh Ponnuru. David Frum. I keep up with Greg Mankiw, but he's gone downhill.

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Cambridge, Mass.: You said today that an employer mandate made all the difference in the CBO scoring of the HELP plan, so it seems almost certain that a mandate will be included. What does that do to the system as far as further locking it in to one in which health insurance is, by a quirk of WWII history, linked to employment? One of the big hopes of reformers is to decouple these, this seems like a step in the opposite direction.

washingtonpost.com: CBO Gives Us the Key to Health-Care Reform: The Employer Mandate

Ezra Klein: It's a huge problem. I keep calling this comprehensive incrementalism, and I think it fits. We're doing a lot to help people access the system and protect themselves from its excesses. But we're not doing much to reform the system. And that, fundamentally, is what we need to do.

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Washington, DC: So do you think a constitutional amendment that gives more senators to larger states (from a range of 2 to, say, 8) would be feasible? I believe that is how it works in Germany's upper house, the Bundesrat. It would leave the system pretty much intact but a bit more realistic.

(While we are at it we could scrap the electoral college too.)

Ezra Klein: Not feasible. But still totally necessary. Hell, if it were up to, I'd abolish the Senate totally. It's an insane institution. No one has ever convincingly explained to my why it is important for the country to give a Wyoming resident more political power than a New Yorker. I get why we made that compromise originally.I don't see why we've kept it.

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Half-Brazilian: Ezra, I'm half-Brazilian too, and Fogo de Chao (it always cracks me up when people pronounce it "chow") IS a real churrascaria. There's one not far from my old house in Sao Paulo. That's my family's favorite place to take me when I visit. Wretched excess is just the name of the game in every churrascaria. I'm always staggered by the quantities of meat my waifish aunt, who at 60-something looks less than half her age, can put away. It's a skill that's learned through practice, practice, practice, and one I totally lack.

Ezra Klein: It is a skill. Particularly turning the little disk that tells them to stop bringing you food. I'm not good at that and so end up with a mountain of meat on my plate that quickly intimidates me into submission.

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Public Option Costs NOTHING? : Public plan -- cost to the taxpayers of $0? Seriously? Ezra, I read your stuff almost religiously and think you're really smart, but this is what passes for analysis?

Yes, it may initially cost less because it will underpay providers. Low-risk folks (young, healthy, etc) will flock to it because it's cheaper than their employer-provided insurance. Employer-based insurance goes into the cost death spiral because only the unhealthy, older, high-risk enrollees remain.

As private insurance plans start going out of business, hospitals and doctors are less able to cost shift from Medicaid, Medicare, and the public plan to private insurers. Then providers start going out of business. Pretty soon - bye bye quality health care in the U.S.

I'd be happy to see your explanation as for why this WOULDN'T happen.

Ezra Klein: Because it hasn't happened in any other country. All our competitors pretty much match our quality and halve our prices, In the scenario I'm talking about, the public plan won't cost taxpayers anything, but it won't save them much, either. In the scenario you're talking about -- a scenario I consider unlikely -- it would save taxpayers a tremendous amount of money, and it would find some sort of pricing equilibrium with providers.

But let me be clear: I think we spend too much on health care in this country. I think we should spend less. So I am willing to make health care less profitable for providers. This does not strike me as a bug, but a feature.

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Fayetteville, N.C.: Have you ever been to the VA hospital and seen their medical records in action? The clinicians have everything in one location (to include DOD records, images, and records from other VAs). And, they give it away for free. Why is this never discussed in the conversations about EMRs?

Ezra Klein: I discuss it all the time! VA is a huge success story. Read Phil Longman's "Best Care Anywhere."

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Washington DC: The flier about paying to attend a "Salon" at Katherine Weymouth's house apparently appalled the Executive Editor Marcus Brauchli. That said, it appears to have been concocted not only by the "business side," but also the Publisher and CEO of the Washington Post's publisher, Katherine Weymouth. Doesn't this compromise the newspaper when it is the person at the top who is soliciting influence?

Ezra Klein: I really just don't know enough about Weymouth's involvement to comment. It may be that her house is frequently used for salons and she didn't know this one was different. I honestly have no idea. I can only speak as part of the newsroom, and the newsroom shot our involvement down pretty quickly.

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Lower Makefield, Pa.: "ANd second, the plans under consideration have so-called 'firewalls' preventing people with employer-based coverage from buying in."

The House bill has a firewall to prevent buy-in?

Ezra Klein: Nope, House bill is a much more open Exchange.

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Cleveland: Have you heard when they expect the Tri-committee's health care bill to be scored by CBO?

Ezra Klein: Nope. Looking forward to it, though.

Why yes, I am a nerd. What makes you ask?

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Austin, Texas: What are these "firewalls" you referred to that prevents people with employer group health coverage from buying into the public plan in the exchange?

Ezra Klein: It's a weird name for a simple rule: It basically says that if you are offered employer-based insurance, you can't use the exchange.

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Cambridge, Mass.: "What you're basically seeing here is tension between the politics and policy of health reform."

Can you think of a politically viable path to get the nation off of an employer-based system? I've always had insurance and I still hate it- I changed jobs, taking no time off in between, and still ended up uninsured for a weekend during which my kid got sick. What kind of a system works like that? I'd never do something risky like start my own business the way things are now.

Ezra Klein: I'd open up the exchanges more aggressively and let employers buy in. That way, the exchanges can demonstrate lower costs and more efficiency, employers can move their people over, and the exchanges can begin to replace individual employers offering individual plans.

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Washington, DC: Seems like Dems have been all or nothing when it comes to pass universal healthcare legislation--which is probably why we have nothing right now... Do you think there is any chance for the sake of passing something--anything by the end of the year, that the Dems will consider passing legislation without the public option in place--and perhaps working it in later?

Ezra Klein: I think there's some chance of that if they decide it's necessary. But Dems haven't been all or nothing. What we're looking at right now -- public option or no -- is very, very, very far from "all." It is, at best, "some." It's not single-payer. It's not radical levels of integration. It's not the end of employer-based care. it's not the end of wild profits for the medical industry. Not only is it not "all" of health-care reform, but it's arguably not even "enough."

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Ezra Klein: That does it for me today. Thanks for playing! And enjoy the 4th.

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