The Spectacle Blog

They Still Don’t Get It

By on 1.17.10 | 1:10PM

I don’t know Rep. Tim Murphy (R-PA). Don’t know a thing about him. But if an article about his recent town hall meeting on health care is accurate, and if he is representative of other Congressional Republicans, it looks like they haven’t learned a damned thing over the past year of frenzied debate.

The article in The Almanac reports that “over 50 persons” showed up at a meeting on January 7, “to hear Congressman Tim Murphy speak on pending health care legislation.” But what he told these “persons” showed how out of touch he is.

He starts right out with a bang. The article by Terry Kish says, “Murphy explained that of the over $2.3 trillion spent on healthcare in America each year, about $800 billion is wasted or misused.” This is a line right from Peter Orszag, President Obama’s head of OMB. It is the underlying premise of what the Administration is trying to do on health care – eliminate all that “waste” and thereby balance the federal budget, improve care, and pay for universal health care all at the same time.

Sounds swell. Only problem is there is virtually no support for it. The estimate is based on a single study of spending on Medicare patients at the end of their lives. The researchers looked at the cheapest 10% of geographic areas, and concluded if 100% of all areas were as cheap as the lowest 10%, and if the same differences of cost were applied to the entire population, then we could save 30% of what we currently spend on health care.

There are just a few problems with the analysis:

  1. There are legitimate reasons that 90% of the country is more expensive than the cheapest 10%. Differences in income, ethnic make-up, and health status account for a lot of it.

  2. Not all payment systems are as inefficient as Medicare, especially on preventing fraud and waste. One of the reasons Medicare’s administrative costs are low is because it does little to prevent fraudulent billing. There is far more waste in Medicare than in other insurance programs.

  3. Elderly people at the end of their lives are not similar to the rest of the population is their use of services. End-of-life care is often heroic, expensive, and futile. There is no comparison to the routine care given to most of the population.

Now, other studies have shown that people often do not get the optimal amount of care. But they are every bit as likely to get too little care as too much. If each person got precisely the right care for their condition we could end up spending more, not less, for health care services.

This is not to say that American health care cannot be delivered far more efficiently, but the grasping for pain-free remedies amounts to wishful thinking.

Mr. Murphy is also quoted in the article as saying, “Disease management is the thing we need to be doing.” This, in spite of the evidence from thirty-five Medicare demonstration programs that disease management does not save money, and may not improve health. It is another panacea that is unsupported by any evidence. He also says, “preventative care programs would be a major cost saver.”  Here again, the evidence shows just the opposite. A recent study in the journal Health Affairs was explicit – “hundreds of studies have shown that prevention usually adds to medical costs instead of reducing them.”

The article goes on to report, “Murphy said the House bill also calls for a 40 percent tax on health insurance plans above $8500 per individual or $23,000 for a family.” Actually, that “Cadillac Tax” is in the Senate bill, it is not in the House bill. One might think that a member of the House would know what is in the most controversial piece of legislation of the past 40 years.

The article also says, “The House bill does contain the choice to buy a basic health insurance plan, something Murphy compared to purchasing car insurance; people can chose the level of coverage they need. Currently, states mandate what insurance companies have to cover.” This, too, is wrong. The House bill does propose several levels of coverage but all are “comprehensive,” not “basic.” And all “mandate what insurance companies have to cover.”

Mr. Murphy forgets to mention malpractice reform as an issue he could support until he is pressed on it by a questioner. And he completely ignores the essential problem in American health care – the excessive reliance on third-party payment. In fact, he says not a word about Health Savings Accounts or consumer empowerment in the health care system.

If this is the Republican alternative to the Big Government Democrats, we are in for some pretty rough sledding this year.

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