When Do We Bend The Curve?

The Times pretends to cover brewing Democratic agita on the absence of cost-cutting reforms in ObamaCare, but they duck the contentious issue such as malpractice reform:

Democrats Raise Alarms Over Costs of Health Bills

By SHERYL GAY STOLBERG

WASHINGTON — As health care legislation moves toward a crucial airing in the Senate, the White House is facing a growing revolt from some Democrats and analysts who say the bills Congress is considering do not fulfill President Obama’s promise to slow the runaway rise in health care spending.

Mr. Obama has made cost containment a centerpiece of his health reform agenda, and in May he stood up at the White House with industry groups who pledged voluntary efforts to trim the growth of health care spending by 1.5 percent, or $2 trillion, over the next decade.

But health economists say it is impossible to know whether the bills, including one passed by the House on Saturday night, would meet that goal, and many are skeptical that they even come close.

The Times presents a little list:

There are a variety of ideas for attacking cost increases more aggressively, including setting Medicare reimbursement rates for doctors and hospitals more rigorously and discouraging workers and employers from buying expensive health insurance policies that mask the true costs of treatment.

Among other innovations being considered is a cost-cutting method known as bundling, in which health providers receive a lump sum to care for a patient with a particular medical condition, say, diabetes or heart disease. The House bill calls for the administration to develop a plan for bundling, while the Senate Finance Committee version of the bill gives it until 2013 to create a pilot program.

The Washington Post made a much more serious attempt to cover this last week:

Now, as the debate reaches a critical juncture, many are worried that the president's ambitious hopes to constrain costs could result in tepid half-measures on Capitol Hill. Among the concerns:

-- A Senate plan to tax high-priced insurance policies saves far less money -- and is less likely to change medical consumption -- than eliminating the tax exemption for employer-sponsored coverage.

-- Proposals on comparative-effectiveness research and a new Medicare cost-cutting commission have been watered down.

-- An array of Medicare pilot projects aimed at paying doctors and hospitals for quality rather than quantity would take years to be implemented nationally -- if they ever were.

-- None of the bills addresses medical liability, even though the Congressional Budget Office has concluded that tort reform could save $54 billion over the next decade.

Times readrers don't want to be vexed by talk of tort reform, even though Obama pretended to support it in his big health care speech; legitimate news organizations don't cover Republican talking points.

However, without saying so the Times takes us back to the "death panel" debate of last summer:

Experts agree that the Senate Finance bill does more to put systemic changes in place. That is because the bill includes two measures that health economists favor: a tax on high-value “Cadillac” health plans, and an independent commission that would make binding recommendations on how to cut Medicare costs.

Just don't call that commission a "death panel".

PILING ON:  All this talk of cutting Medicare costs scares seniors.  And Mickey Kaus.

OUR ECON 101 MOMENT:  The Times correctly notes that allowing employers to deduct the cost of health insurance reduces the net after-tax cost of health care to covered employees, thereby boosting demand for health care services.  Absent any changes on the supply side, this results in a higher-than-otherwise price for health services.

And how does ObamaCare propose to bring down the cost of health care?  By subsidizing the purchase for insurance or people with lower incomes, thereby expanding demand for health services.  ("Free" clinics receiving payments from the government will see a reduction in uncovered patients and also in their government reimbursement, which should represent a partial offset.)

But subsidizing demand without changing supply only reduces the price paid by the beneficiary of the subsidy; the increase in demand will increase prices paid by society as a whole.

So what is ObamaCare doing on the supply side? Not much - taxing "Cadillac" insurance plans may reduce demand from "Cadillac" customer.  But increasing supply would involve steps such as easing licensing requirements for doctors or allowing nurse practitioners to take over tasks now reserved for doctors. 

You don't control costs by subsidizing an increase in demand.  Obviously.

Comments

[Frau Leibesübung]

Who's talking? Bubba has teabagger eyes.

[Extraneus]

Heh. I posted that yesterday just for you, you didn't see it?

Witness: Hassan yelled “I want a candy bar” during spree

(I'm sure your guess is right on that.)

[clarice]

I thought I'd seen it Ext--forgive me for a duplicate post but I just couldn't remember it specifically enough to recall if it was posted here.

[clarice]

I wonder if this will put an end to the FBI practice of dashing to the scenes of jihadi massacres, leaping over the bloody corpses and without even touching ground announce there's no evidence of "terrorism" in this massacre?

Senior Official: More Hasan Ties
to People Under Investigation by FBI
ABC News, by Martha Raddatz, Brian Ross,*
A senior government official tells ABC News that investigators have found that alleged Fort Hood shooter Nidal Malik Hasan had "more unexplained connections to people being tracked by the FBI" than just radical cleric Anwar al Awlaki. The official declined to name the individuals but Congressional sources said their names and countries of origin were likely to emerge soon.

[Jim Rhoads a/k/a vjnjagvet]

I think Jane's suggestions generally make sense. But I would not curb either plaintiff or defense lawyers with an absolute max. Rather, I would use the kind of compensation used in civil rights and bankruptcy cases. The "Lodestar" system requires judicial supervision, and discourages outrageous windfalls in cases with particularly egregious damages.

Also, I would not curb damages for pain and suffering since that is has been an element of common law damages for personal injury which has been recognized for nearly two centuries. These are submitted to the "enlightened conscience of a fair and impartial juror" and large verdicts are generally consistent with the seriousness of the injuries.

I would have punitive damages go to the State in which the damage took place for supplementing medical care it provides to the indigent.

As Jane points out there simply are Doctors (and Lawyers too) that "need suin'" as we say in the Souf:>)

[Dave (in MA)]

">http://tunedintocycling.files.wordpress.com/2008/05/raisins1-custom.jpg">
DC Sniper John Allen Muhammad Is Executed in Virginia
FOXNews - ‎3 minutes ago‎
AP RICHMOND, Virginia — John Allen Muhammad was executed Tuesday night for the sniper attacks in 2002

[clarice]

That, too, wasn't "terrorism" according to the FBI at the time--even though people were petrified to venture out of their homes all around the beltway.And to go to a filling station to get gas was to put your life on the line.

[Melinda Romanoff]

Ex-

Please keep in mind the AMA is HQ'd here, in Chicago.

It explains a lot.

[Strawman Cometh]

Yes, Jim.
Also, "He needed killin'" is still recognized as a cogent defense strategy in some parts. At least it outta.

[Frau Leibesübung]

Jane, shout it from the mountain tops!

clarice, we've got to keep laughing with Iowahawk. It wee-wee's them terribly.

[Sara (Pal2Pal)]

The daughter of a close friend of mine in Maryland was a witness during the manhunt for the DC Sniper. It was a terrifying time. He got what he deserved.

[Jim Rhoads a/k/a vjnjagvet]

The Fort Hood Killer deserves to join Mr. Mohammed -- sooner rather than later.

Diversity be damned.

[Fresh Air]

Jane--

The vast majority of doctors who get sued may indeed deserve to be. The trial costs are but a fraction of the total, though, and exclude the massive number of out-of-court settlements. Most insurance companies would rather settle than fight. They just pass on the higher premiums to the docs, who pass them on to...

Well, you know how this works. Auto insurance runs exactly the same way.

There actually is a way to accommodate the "progressive" desire for total health care coverage, provided they are willing to concede there must be a certain amount of financial pain from recpients: catastrophic only coverage. A national cat pool for otherwise uninsured could work quite well.

But you would need the covereds to kick in some dough or make the states pay their premiums. They could opt out but if they did and had no insurance, they would be ineligible for [choose your government insurance program]. This was the structure of the Freedom to Farm crop insurance program enacted in 1994. Farmers who wished to remain eligible for federal disaster relief had to purchase basic cat insurance first.

Of course, abortions likely wouldn't be viewed as a "catastrophic" medical need, so the liberals wouldn't go for it. But it's just one example of many ways to accomplish what they say they want. We all know, however, what they really want is something completely different.

[Dave (in MA)]

He was put down at 9:11. Raise a toast to Kentucky truck driver Ron Lantz who found him and alerted the police while blocking the exit to the rest area with his truck.

[Jim Rhoads a/k/a vjnjagvet]

So is the ABA, Melinda. It probably is as bad as the AMA. The massive staffs of both drink from the same lake -- if you get my drift.

[clarice]

Good for Lantz. At the time, the press was glorifying the Chief of Police of Montogmery Co who was such a yutz that even though every time they did a roadblock Muhammed's tags would show up as being there, he was still looking for a white van some witness thought he'd seen as an earlier crime scene and damned ignored the evidence before his very eyes..
nce again,an ordinary citizen with guts and intelligence does what an entire multi-state police task force and FBI teams could not do.

[Jane]

Jim,

I've always calculated pain and suffering as part of economic damages. My first job out of college was as a claims adjuster, my second as a risk manager so I'm fairly familiar with how defense calculates damages despite my legal tenure on the other side. As you know, in general when you calculate partial and total disability, and permanency - which is always the most expensive part - that total is intended as "pain and suffering". The defense doesn't like the words "pain and suffering" but recognize that disability and permanency are valid damages. So I agree with you on that part.

I'm not familiar with the lodestar system, but I do know that in my entire career every move I have ever made has been calculated to bring the other side to the table. The reason I like the cap on attorney's fees is that it forces the defense who generally has unlimited resources to look at the value of the case more than their own pocket book. Even in litigation the value of the case is generally still left to the adjuster.

And I think that is better for both side's clients which is what we are supposed to be in it for.

[Melinda Romanoff]

Jim-

So do I, but I guess I don't inhale. But the AMA's building looks just like a glass version of the Municipal Correction Center.

(If you think I can embed photos, you've got another thing coming. I'm lucky I still know how to type...)

[Melinda Romanoff]

Jane-

That's a very clean, reasonable approach, and, of course, toxic.

But I can dream....

[Melinda Romanoff]

Night all.

[Sara (Pal2Pal)]

Jane: You asked about "V" in the other thread. Check this out:

Hope for Hollywood?

[Jane]

Jim,

One more thing before we beat this dead horse to a pulp - the downside of capping lawyer's fees is to force some sort of pure comparative negligence state - which is what Florida has I think. Everyone will settle, regardless of the merits.

You also won't always get to the bottom of the story if you cap attorney's fees. I had a million dollar med mal case against a subsidy of a huge company which took 7 years to get to fruition. The defendant hid everything, every step of the way. By the time we went to trial I had more boxes than I could fit in my office. It took years to get to the bottom of what really went on. Not many people would put that much work into a case with capped attorney fees, and the defendant would have clearly gotten off easy if I hadn't. (To this day I believe that the case settled because the Judge scheduled trial shortly after the opening of "A Civil Action" which was written by a local attorney about the parent company and the Judge would not allow the defense motion to forbid me from using the name of the parent company)

[Jim Rhoads a/k/a vjnjagvet]

Jane:

In CR cases, the "prevailing party" is entitled to "reasonable attorneys fees" at the discretion of the trial judge.

Over the past 40 years, the courts have used a relatively standard analysis which has become known as the lodestar system. Unless agreed to by the parties (which often happens) It requires the lawyers to submit detailed billing to the court including tasks performed, time expended and hourly rate. The court sets the hourly rate by considering evidence of market rates for lawyers with similar experience and reputation to counsel winning the case. Each side gets to take shots at the others bills (the losers typically have to produce their bills). All federal judges and many state judges are familiar with this system and there is a considerable body of case law on the subject.

IN GA, pain and suffering are separate from purely economic damages and are intended to compensate the victim for the results of the injury in every day living and actual pain of treatment (like severe burns, lost reproductive organs or the like).

Sorry for the length, but this is a realistic and well-known system that is fair to the parties and the lawyers. It also is a loser pays system and penalizes attorneys from either side who string out cases for no purpose..

[cathyf]

I decided to do a little algebra to compare the 85% loss ratio mandated in PelosiCare to the 65% ratio that Doug Ross says is SOP for a healthy insurance company in a competitive market.

Start with a hypothetical medical bill of $1,980.

Current brutal insurance-company-has-doc-over-barrel system:

insurance disallows: $1,395
insurance pays: $535
insurance premium: $900
ratio: 65%

PelosiCare:

insurance disallows: $195
insurance pays: $1,785
insurance premium: $2,100
ratio: 85%

If you pay $900/month in premiums, the House just passed a law mandating that your premiums go up to $2,100/month for exactly the same medical coverage. If you are a health care professional, you will see your income more than triple. No wonder the AMA endorsed it!!!

[Jane]

Jim,

My problem with that is I have never once recorded time for a bill. It would kill me to start. Then again, I no longer do that kind of work (and I still don't keep track of time).

BTW does anyone think Kaine would have commuted the shooter's sentence had the Hasan terrorism not have happened?

[Sara (Pal2Pal)]

John Allen Muhammad: Time of Death 9:11

[Tort Reform for Geniuses.]

Heh, subsidiary, Jane. I like subsidy too, though. What a nice discussion.
=======================

[Mary]

Jane,

I think Kaine would not have commuted this sentence. Hasan spent some time in the Richmond and Ashland area. Kaine's wife is the daughter of a former governer ( LInwood Holton R) who I am sure advised against commutation.

Kaine was the mayor of Richmond as well as lt. governer so he really does know the local attitude.

[Jim Rhoads a/k/a vjnjagvet]

I hate keeping time too, Jane. But I ended up with a partner who was meticulous about keeping time and insisted all of our lawyers do so. He let me alone for a few years, but I had to change my ways in order to keep peace within the firm. Alas, timekeeping remains the most distasteful part of practicing law to me.

I now work primarily on a fixed fee -- lump sum or monthly; but I'm semi-retired:>(

[Captain Hate]

Oh, and I'm sorry I couldn't tell you more about peter than I did, ut that was his choice.

I found PUK's modesty or reticence a very refreshing contrast to the "look at me" world. You dropped enough hints in the pre-Christmas thread for me to know he was somebody of substance; that and his obvious musical knowledge that he'd display in the rare moment.

[Mustang0302]

Dave (in MA) | November 10, 2009 at 09:24 PM

Hey! I had one of those raisins about six months ago!

You got sold a pig in a poke, Johnny!

[centralcal]

You dropped enough hints in the pre-Christmas thread for me to know he was somebody of substance;

I agree, with the exception that PUK was somebody of substance even without his musical talent ;)

[Jane]

Jim,

I always thought keeping time was a huge waste of time. Just get the job done. Sheesh
Lawyers are such prissys sometimes.

[Michael Kirsch, M.D.]

There's a reason that only 1 constituency supports the current medical malpractice system. How can you defend a system that:
(1)Is unfair to the medical profession
(2)Causes billions of $$$ in defensive medicine (tests you don't need)
(3)Misses most cases of true medical negligence
(4)Often enriches the lawyers more than the injured patients.

The legal system is worse than the health care system. See www.MDWhistleblower.blogspot.com

[Jane]

Heh, subsidiary, Jane.

I had to go back and read that 4 times before I got it.

Thanks

[Jane]

Dr. Kirsch,

I've never seen a case that enriched the lawyers (plural) (not just the defense lawyer I assume) more than the injured patient. You say that happens often. Can you expound?

How is it, it misses most "true medical negligence" and why aren't doctors reporting that?

How would you change it?

[Rob Crawford]

I've never seen a case that enriched the lawyers (plural) (not just the defense lawyer I assume) more than the injured patient.

You've never heard of John Edwards?

Really?

[Ranger]

The wages of Obamacare:

Republicans Edge Ahead of Democrats in 2010 Vote

Republicans have moved ahead of Democrats by 48% to 44% among registered voters in the latest update on Gallup's generic congressional ballot for the 2010 House elections, after trailing by six points in July and two points last month.

That's a shift of Dem +6 to Dem -4 in just 4 months.

And they key change is?

In the latest poll, independent registered voters favor the Republican candidate by 52% to 30%.

Of course, the Dems are convinced that passing Obamacare will be their salvation.

[Jane]

Class Action suits always render more money for the lawyers than the clients, but in general med mal is done on a percentage - std is a third, I have no doubt some charge more. But even at 50% that is not more money for the lawyer.

[sbw]

Clarice, if no one answered your question about "Bueller? Anyone?" it refers to "Ferris Bueller's Day Off":

Economics Teacher: In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the... Anyone? Anyone?... the Great Depression, passed the... Anyone? Anyone? The tariff bill? The Hawley-Smoot Tariff Act? Which, anyone? Raised or lowered?... raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression. Today we have a similar debate over this. Anyone know what this is? Class? Anyone? Anyone? Anyone seen this before? The Laffer Curve. Anyone know what this says? It says that at this point on the revenue curve, you will get exactly the same amount of revenue as at this point. This is very controversial. Does anyone know what Vice President Bush called this in 1980? Anyone? Something-d-o-o economics. "Voodoo" economics.

[Words, words, words.]

Jane, how about 'subsidence' instead?
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