washingtonpost.com
Pearlstein on Health-Care Reform

Steven Pearlstein
Washington Post Columnist
Wednesday, August 26, 2009 11:00 AM

Washington Post business columnist Steven Pearlstein was online Wednesday, August 26 at 11 a.m. ET to discuss health-care reform.

Pearlstein won a Pulitzer Prize in 2008 and is co-moderator of the On Leadership discussion site.

Read today's column: The GOP's Top Chef Starves a Beast and Poisons a Debate.

A transcript follows.

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Dallas, Texas: So what happens if we do nothing to curb medical/Medicare spending? Or if there is no reform? Would the government go broke and stop paying? Would services become so costly that no one would receive them? We hear the terms "urgent" and "crisis", but what is the answer for "or what?" Thanks.

Steven Pearlstein: If we do nothing to restrain the growth of Medicare spending (which, by the way, would only involve taking off a couple of percentage points of annual growth, say from 6 percent to 4 percent), then this "mandatory" spending will either drive up the deficit, force an increase in taxes or gradually force reduction in other, "discretionary" programs. Those are the only choices. That's just a matter of accounting. So unless you want to "cut" Medicare spending (which, in the special language of Washington budgeting, means cutting the growth from baseline projections), then you either want to raise the deficit, raise taxes or reduce spending somewhere else. And if it is the latter, then you have to reduce A LOT of spending somewhere else. What does Mr. Steele propose to do. None of those. That, apparently, is his idea of leadership.

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Laurel, Md.: Steven, one of the more touchy subjects about health care reform is the coverage of illegal immigrants. Although the bill specifically states they will not be covered, a columnist on townhall.com says there's a loophole in that the bill lacks a mechanism to prevent them from doing so:

Liberal Lies About Obamacare

"The legislation contains no verification mechanism to ensure that illegal immigrants do not apply for benefits. Republicans offered an amendment to close this loophole - it would have required verification using the existing methods that are already in place to verify eligibility for other federal benefits programs. But when they were asked to put the language of the bill where their words were, in a party-line vote, House Democrats rejected the amendment to require verification and close this loophole."

Steven Pearlstein: Can't say I know anything about that. Obviously, coverage of illegals is a hot button issue. The public simply won't stand for it, no matter what you or I may think. In the end, there will be immigration status verification to qualify at least for the subsidies under the bill, I'm pretty sure of that. If illegals want to pay full price for insurance, there is probably not going to be a way to stop that without requiring all employees at all companies to go through a rigorous checking process every year.

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Houston, Texas: Steven, In your previous column you advised Democrats to drop the public option because it gave Republicans ammunition to oppose health care reform. In today's column you document the extent to which Republicans will lie and distort facts in their quest to kill health care reform. My question is: why should Democrats(liberals) give up something they firmly believe in like the public option to accommodate the prejudices of today's Republicans? This is not a well-intentioned dialog with people that have an honest difference of opinion. As Joe Klein put in Time, they are nihilists. Democrats need to ignore the Republicans and implement what they believe is the best policy.

Steven Pearlstein: I agree with you that Democrats probably are going to have to pass a bill without much Republican support in either chamber, at least during these phases up to final passage of the conference committee report. The Republicans are not dealing in good faith. But that doesn't mean they should simply pass a bill that Democrats, and in particular Democrats in Congress, like, because that will be too liberal for the country and they run the risk that there will be a big backlash and, in the end, even moderate Democrats won't vote for the bill. So they need to project ahead to the end game, understand what the country will and will not tolerate and pass a bill that has the support of a solid majority of Americans, not simply a narrow majority in the House and Senate. That is why they should drop the public option and make other adjustments -- and they might as well do it now because the longer the wait, the more they allow the other side to create opposition to doing anything. To use the language of football, this isn't just a ground game, which is the way Congressional insiders tend to see it. Obama and the Dems also have to have an air game. They have to work the inside but also the outside, to change metaphors, simultaneously. So I disagree with Joe in that Dems have to do what they think is right. They have to do what they think is right and is consistent with what a good majority of Americans want or are willing to tolerate at this point. And that involves making compromises with themselves, which isn't as silly as it may sound.

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Reston, Va.: Steven: Posting early, but please allow me to solve the health-care reform impasse in two easy steps. 1. Republicans allow the bill to pass, giving the Dems just about everything they want, with the law to be implemented in 2013 (2014? 2015?) 2. In order for health-care reform to become absolute law in the chosen year, the deficit has to be cut in half as already promised, less than $500 billion. Something for both sides, and everyone wins.

Steven Pearlstein: Not a bad idea, Reston.

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Washington, D.C.: In the face of all the rhetoric and accusations, I'm rather confused as to what "the plan" being discussed is. I see a lot of fears about the plans, anger about the plan, etc... Can you point to some place where a person can find out what is being proposed?

I have the impression that right now the discussion is around how to make insurance accessible to more people, with options like possibly by not making it tied to jobs, or having people be able to form co-ops. Some things to make it easier to get some kind of insurance, and a government insurance plan as a fall back. Is that the gist of it, or is that the aspect that's getting serious coverage this week?

Steven Pearlstein: You've got a lot of it there, although this is complicated and there are lots of moving parts. Best to check at the web site of the Congressional Budget Office, under the health reform tab, which has CBO estimates of the costs of the House bill, the Senate Health and labor Bill and some variations on the Senate Finance Bill. Those actually have good descriptions of what are in the bills as well. Good luck.

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Bowie, Md.: Steven, could you go over again (probably for the Nth time, since this is pretty basic and I'm kind of late to the weeks-long discussion) what kinds of payment denials there would be under the Obama plan?

No plan can be an infinite blank check; there have to be some people who would be denied payment, which in real life would result in denial of life-saving treatment. And of course, this is always the ethical dimension of what price we won't pay for life.

Steven Pearlstein: The laws don't say what payment denials there will be, although they do spell out in some detail the kinds of things that MUST be included in the minimum package that is offered through the state/regional exchanges (which is not all insurance). Generally speaking, the policies say that they cover services that are considered medically necessary, but as you understand, that allows for a fair amount of interpretation. If you are buying insurance from the exchange, you can comparison shop in terms of the stated policy benefits, which may be some help, and can check consumer web sites to see how current customers rate the coverage. But in the end it all comes down to the details.

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New York: Steven; Why do you think president Obama is having difficulty articulating the obvious? Most Americans that have insurance are unhappy (if not disgusted) with their insurance coverage. I can tell you for my self, my neighbors, my friends, my family; my co-workers have countless examples of how insurance companies choose not cover certain things. This is happening across the country. This is what President Obama's administration is trying to fix, in addition to covering the uninsured. This shouldn't be too difficult to explain to the American public.

Steven Pearlstein: Alas, most Americans don't think they are unhappy. They are probably happy enough and adverse enough toward change that they are willing to stick with what they have rather than risk moving to a system that people in Washington say is better. THAT is Obama's political challenge.

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22202: Steven - I heard you on NPR on Sunday, and you stated that Medicare costs are going up as quickly as costs in the private health sector. When the host pressed you on this, you then said something to the effect, that Medicare SPENDING was going up. Now rising costs and rising expenditures not necessarily correlated, particularly if the over 65 age group is growing. So did you misspeak? Or was this an obfuscation? I have no stake either way, but you're usually a straight-talker.

Steven Pearlstein: Medicare spending per person is going up as fast as spending per person in private insurance. In other words, Medicare may start with a lower cost base, but its costs are rising at the same rate as private plans. Not sure I or anyone else can be much clearer than that.

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Indianapolis, Ind.: In my job I am one of only 3 people (out of about 500) who are not covered by my employer's health plan. Because I am retired military, I have my family on Tricare Prime. Are you familiar with Tricare? It's a government sponsored health insurance for retired military (and active duty stationed too far from military health care facilities).

It is managed care like many plans so you have to be in network to get the most for your benefit. We were nervous when we joined; but after 3 years and one surgery we have no complaints about the quality of care of the availability of doctors in the network.

What I love about Tricare is it goes where I go. It doesn't matter if I change jobs or if I lose my job. And it's affordable. Eye, medical and dental for the family are $140 a month! no kidding.

There's so much about health care I don't know, but what I wonder is if there are features about Tricare that can be duplicated for small business people or the underemployed. Even if it's designed to set rates that improve for people who do a better job of making healthy choices (stop smoking, for example). But at the way things are going now, it's not possible to have a serious HONEST public debate about the issue. Now that's the real crime!! These idiots go on TV like this is some kind of game. Sorry for the long post.

Steven Pearlstein: In effect, that is exactly what Obama and the Democrats are trying to do, recreate the TriCare or the Federal Employee Health Benefit model for a wider population.

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Boston, Mass.: Getting this in early. I found Michael Steele's op-ed almost laughable. The GOP had its chance to move to small government and did the exact opposite. And to say that the government will not get between you and your doctor? I have 2 words: Terri Schiavo.

Steven Pearlstein: Indeed!

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Germantown, Md.: I have read that most states do not allow health insurance companies to offer their products across state lines. Wouldn't it help to allow companies to compete with each other?

Steven Pearlstein: The Democratic proposal would finally end that silly prohibition and allow companies to offer their products nationally.

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Great Falls, Va.: This is off-topic, but I'm hopeful that you'll address it.

Two years ago, yours was one of a small set of voices that I heeded, cautioning of the massive economic turmoil to come. Those columns, in part, won you a very well-deserved Pulitzer.

Today, the same small set of voices are denying the conventional wisdom of a recovery. Their view is that the primary driver of economic improvement has been government stimulus, but once that is removed, there is little in the way of bright spots in the private sector. Many see a significant correction in the stock market still to come.

I'd be curious to hear your thoughts.

Steven Pearlstein: Some aspects of the economy have come out of a free fall and are declining less steeply, or may be actually improving. To the ordinary person, things don't feel so good, but business profits have stabilized and credit is flowing and the stock market has rallied strongly. I believe this market rally is a bear market rally, that it will turn down again and that the economy, after perhaps showing a quarter or two of modest growth, will begin to shrink again in the first half of next year. This is also referred to as a double-dip recession, and it is not uncommon. I'm not alone in this view, although economic forecasters generally are more optimistic because their computer models have this irrepressible urge to return to "equilibrium". I have no proof for my belief other than gut feel developed over a long period of time. We'll have to wait to see who is right.

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Boston: It is said that the "Lord works in mysterious ways," but you really have to scratch your head at the painful historical irony of Ted Kennedy being sidelined and then succumbing during what may be the best chance to reform health care over the last twenty years and maybe another decade or two going forward. Do you think his deal-making experience would have helped seal a deal before the well was poisoned late in the summer if he had been healthy during this time?

Steven Pearlstein: He would have been very helpful in getting a deal that could survive the Senate. But his death may spur the country to come together on this and finally do something in his honor.

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Burke, Va.: Steven, you're a brave man. You're going to get so much hate email from the humor-impaired crazies who don't realize your tongue was firmly in cheek when you wrote today's column. What a great way to make your point!

Steven Pearlstein: Yeah, getting the tone right on this one wasn't easy, and I'm not sure I fully succeeded. A lot of calls back and forth last night with editors.

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Falls Church, Va.: For decades, Democrats have been demagoguing the voters about how Republicans want to gut Medicare. It's kind of fun to watch commentators like you becoming unhinged now that the roles have switched.

Given how hard the administration has been working to kill the death panel rumor, it's amazing to see you stand up and shout, "It's all true! The Obama plan will cut off care to senior citizens!"

Steven Pearlstein: The schadenfruede, or however you spell it, is deserved, I grant you. Democrats have demogogued on Medicare for years, and now they may be reaping what they sowed. But once the gloating is over, we still have to do this and do it right. This isn't a political game.

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Medicare spending per person is going up as fast as spending per person in private insurance. : This is in flat disagreement with Paul Krugman, Uwe Reinhardt, Jacob Hacker.....

Have you been reading Cato reports?

Steven Pearlstein: I think you better check on that. Medicare spending growth per person is not any better over time. There are periods when it is, but that often involves cost cost shifting onto private payers. And the reason is simply: Medicare doesn't manage care, so its only lever is to push down payment rates to doctors and hospitals, which works until it doesn't and Congress gives it all back.

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DC: This is the Republican stance, near as I can tell:

Government intervention into health care is tyranny, and it is vital that we protect Medicare from any cuts.

Does it even matter that this completely nonsensical? It is such nonsense that I think the Post should have refused Steele's piece -- it is completely without merit. Why do we pretend to have a debate when one side has no interest in a debate?

Steven Pearlstein: I think you raise a good point about whether the Post should have printed Steele's piece. Any modicum of fact checking would have demonstrated that he had created totally fictitious straw men, claiming the Democrats had proposed something that they clearly hadn't. It's one thing if people have different opinions -- that is what an op ed page is for. But lieing about what the other side is proposing is not a matter of a differenc of opinion.

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and the stock market has rallied strongly: So the stock market is a prime mover?

Or just a little barometer?

If the latter, did the little donkey's tail blow off in our economic Katrina?

Thanks.

Steven Pearlstein: It's both -- and it is not, over the short term, necessarily a reliable predictor.

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This isn't a political game. : It's ALL a political game.

That's why nothing is ever accomplished toward solving national problems, let alone global ones.

Go ask Mother Nature if you don't believe me.

Thanks much. Registered Engineer

Steven Pearlstein: Okay, it shouldn't be a political game.

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Florissant Valley, Mo.: Hey, Steve. we've come a long way from Mark Twain's comment about: "Imagine an idiot. Now imagine a Congressman., But I repeat myself." In fact, I give most of Congress credit for brains when they aren't on the stump or otherwise being political. So don't they KNOW when some of these exaggerations are floated (or when they float them themselves) that they are false? Could they not therefore, when the bill becomes public, vote on its merits? Won't the actual bill help lay some of the irrational fears to rest? Thanks

Steven Pearlstein: Yes, having an single bill would be helpful to this debate. But it's a democratic process and getting to that is a useful and important exercise, although it is susceptible to being hijacked by irresponsible jerks like Michael Steele.

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Washington, D.C.: I used to think you were an economist writing about political issues. Since Obama was elected, it has become obvious that you are just a political hack. Your writing isn't even persuasive anymore because it is so predictable and the rhetoric you use is tired. It wouldn't surprise me if one of Nancy Pelosi's aides wrote this for you.

Steven Pearlstein: Gee, when I wrote that Obama should give up on the public option, I got accused of being in the pocket of the right wingers. Can't you folks make up your mind?

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Alexandria, Va.: Amazing column today. The first half attacks Steele for thinking that cuts in health care won't be necessary, and the second half attacks him for suggesting that the reform plans will make cuts in health care.

I know you're striving for shock value rather than accuracy or logic, but when you argue "There have to be cuts! Why does he think there have to be cuts!" in the space of the same column, one has to start questioning your sanity.

Steven Pearlstein: Not sure I understand. Of course there have to be "cuts," if you mean cuts in spending growth. That doesnt necessarily translate into cuts in benefits -- it could easily mean cuts in unnecessary care.

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Arlington, Va.: It's shameful to see you regurgitating the "18,000 deaths" canard. Repeating that lie strips you of any integrity in calling out lies by other parties.

And a lie it is. That 18,000 figure does not represent any actual deaths. The IOM estimated the marginal increase in risk for various ailments to various populations, and made assumptions about how many marginal estimates should add up to one life. It's statistical hand-waving with no connection to lives and deaths in the real world.

And even if one accepts that methodology as yielding something meaningful, it's been authoritatively debunked.

Steven Pearlstein: Really? By whom?

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Myersville, Md.: Hi, I've been trying to get an answer for quite a while now - can you please explain how the "mandate" to get health insurance will work and how it will be affordable to someone who chooses to take the chance that they will not have to visit a doctor or dentist more than 2 or 3 times a year for far less than insurance coverage costs? Thank you!

Steven Pearlstein: If you don't have proof of insurance at tax time, you will have to pay a penalty -- that's how it will work. And if the premiums are any more than, say, 12 percent of your pretax income, then you will qualify for subsidies in the form of a refundable tax credit. Something like that.

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Madison, Wisc.: Thanks for your article and for taking questions. Michael Gerson says in his column today that President Obama's health care initiative is failing, not just because of Republican opposition but because many Democrats and independents are suspicious of the plan's possible effects on health care and the economy.

Is he right? Is the initiative failing? With the passing of Senator Kennedy, my hope is fading.

washingtonpost.com: Why Obamacare is Failing

Steven Pearlstein: The intiative isn't failed, or even failing, but support has slipped as Republicans have attacked it unfairly and as Americans conclude there are things about it they legitimately don't like. But don't lose hope -- something will pass.

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Chicago, Ill.: Oh man, what a great column. It's such a joy to read an honest explanation of the logical results of the GOP's current proposals. Logic and reason have been in short supply in this "debate."

But a question -- has the U.S. evolved to a point where it can no longer do something like comprehensive health care reform? There are too many special interests, too much money, and too many bomb throwers pendering to too many conspiracy theorists. I wonder whether this is a futile effort. Thanks.

Steven Pearlstein: The interesting thing is that this isn't a debate poisoned by special interest lobbying, for the most part. It is all partisan, ideological crap, mostly on the right but on the left as well. The special interests are behaving themselves this time -- they like some things, don't like others, but are participating responsibly and don't want to be accused of killing to whole effort. My hat is off to them.

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Laurel, Md.: Steven, Please settle a discussion we're having. When and why did employer sponsored health insurance start?

Steven Pearlstein: Was mostly a solution to a postwar labor market problem faced by big employers and big unions. At the moment I forget the particulars, but it is one of those things that seemed like a good idea at the time and didn't really involve much money. Back then, health insurance was relatively cheap because there wasn't much doctors could do about a lot of things. The big driver in the escalation in medical costs is that the technology is so much better and there are lots of things medicine can do to make people healthier and live longer and life much richer lives. We shouldn't forget that in this debate, even as we point out the other drivers, like unnecessary care and inflated doctors incomes and hospital profits and wasteful administrative expenses.

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Seattle, Wash.: "If you like your insurance company; you can keep them." Isn't that the problem; that the debate should be "if you like your doctor you can keep him"?

It seems to me that the Republicans have allowed this debate to degenerate into one of trying to support the distribution system (the insurance industry); instead of dealing with the actual product. Analogous to the debate earlier this decade as to whether we would allow direct download of music; instead of forcing people to use record stores and all music going through the top 5 music distributors. The distributors had reached a point where they consumed most of the profits; yet no longer could justify that based on their limited value added. So despite claims that music innovation would end; and even attempts at suing their customers; the system changed.

Isn't that the issue now with health care? The insurance industry (and overhead in general) have allowed the system to get so expensive as to be unsustainable; and have yet to define a compelling place for themselves to warrant their 40% overhead? And so their minions are trying to force a continued role at the table?

Thanks.

Steven Pearlstein: That overhead number is inflated. And while insurance companies are not angels, you have to remember that doctors and hospitals share a lot of the blame for a system that has a lot of waste, inefficiency and unnecessary cost. Our doctors tend to be paid twice as much as doctors in other industrialized countries (that's AFTER expenses like malpractice insurance). Our hospitals, non profit as well as profit making, generally earn nice profits and have lots of highly paid executives that you don't find in other countries. Ditto insurers. So its complicated if you're trying to find culprits.

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washingtonpost.com: For those who wish to continue discussing health-care reform, Megan McArdle, staff writer for The Atlantic, will host a chat to discuss why she opposes health-care reform at 1 p.m. ET today. Discussion with Megan McArdle

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Orlando, Fla.: "Have you no shame, sir? Have you no shame?" The last line in your article today, referred to Michael Steele who had the unmitigated gaul to suggest cutting Government Agencies, programs, etc. Shame on you, sir, for suggesting that spending trillions more on health care will somehow reduce government health-care spending. I never met a Liberal without an insatiable appetite to spend other peoples money on THEIR CAUSES. Forget the monumental government failures, for instance, as they proved incapable of properly implementing a $3 billion Cash for Clunkers program. Are you aware that they utilized air traffic controllers to help with processing the paperwork? If you and others get your way, I simply can't wait for an air traffic controller to decide if Grandma should get that artificial hip.

Steven Pearlstein: Why do you think Democrats want to spend more on health care? They want to spend more for some people, and less for other people. On balance, they have pledged to come up with a plan that is "paid for," mostly through savings in other parts of the system. The trillion dollar figure you think you know about is actually misleading, to the point that you might characterize it as a lie. If you say I want the government to spend $1 trillion on subsidies to people so they can afford buying insurance, but I also as part of the plan intend to save $600 million in Medicare, and raise an additional $400 million in revenue by reducing the tax break for employer provided health insurance, is that a program that is going to cost $1 trillion, or is it a wash and won't cost the government an dditional dime. I think you know the answer to that. So let's stop the lies about a trillion dollar cost, shall we?

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Princeton, N.J.: Ezra Klein on health care coverage:

"I've been attending health-care panels and events on a pretty regular basis for four or five years now. Each event, of course, is its own precious snowflake, with its own set of graphs and bullet points and dweebish jokes. But one thing is perfectly predictable: The Q&A session will be dominated by single-payer activists asking about HR 676.

There's not a mystery as to why this happens: Single-payer activists are very well organized, and they make a point to dispatch their people to these events and get their members to the microphone and ensure that their perspective is heard. But as the bills under consideration suggest, politicians have had no problem ignoring the single-payer grassroots. Max Baucus ruled out their participation on day one. The media hasn't shown the slightest inclination to cover their presence at event after event after event."

We have never seen in the Post a careful analysis of HR676 even before it was "off the Table." No analysis of private insurance waste. No comparisons with other countries until it was way too late. Everything written in the Post and other media has obeyed the Prime Law of Health Reform Coverage:

Thou shalt write nothing that will interfere with the obscene compensation of insurance executives or the high returns to their rich stockholders.

Have you no shame, sir? Have you no shame?

Steven Pearlstein: Clever, Len. But trying to put much distance between me and Ezra is going to be hard. We have a good little debate on health care going here every day. It is respectful and intelligent, unlike much of the public debate.

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Alexandria, Va.: Dear Mr. Pearlstein:

Thank you for your rebuttal of the Steele article.

Does the Steele article reveal anything about the acumen of the author, or the intended readership?

How does such an article come to be published in the Washington Post?

Steven Pearlstein: Couldn't tell you about the last question.

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Murphy, N.C.: Does President Obama have the power to nationalize the large health care insurance companies based upon their unwillingness to insure all Americans having the money to pay the premiums?

Steven Pearlstein: No.

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The special interests are behaving themselves this time : Oh really? Behaving as in sending fake letters to congressional representatives using others' identities and forged signatures? Providing talking points to the Republicans and the ditto heads of faux newsdom -- that kind of behaving?

Steven Pearlstein: Like running ads on television saying health care reform is necessary....

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Steven Pearlstein: Got to run, folks. Good discussion. "See" you next week for more.

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