Tuesday, May 5, 2009

"The Language of Healthcare 2009”

Politico is reporting on a confidential report prepared by Republican consultant Frank Luntz for Congressional Republicans that outlines the best political language for Republicans to employ on Healthcare Reform. It includes this interesting list:

Luntz’s 10 pointers in “The Language of Healthcare 2009”:

(1) Humanize your approach. Abandon and exile ALL references to the “healthcare system.” From now on, healthcare is about people. Before you speak, think of the three components of tone that matter most: Individualize. Personalize. Humanize.

(2) Acknowledge the “crisis” or suffer the consequences. If you say there is no healthcare crisis, you give your listener permission to ignore everything else you say. It is a credibility killer for most Americans. A better approach is to define the crisis in your terms. “If you’re one of the millions who can’t afford healthcare, it is a crisis.” Better yet, “If some bureaucrat puts himself between you and your doctor, denying you exactly what you need, that’s a crisis.” And the best: “If you have to wait weeks for tests and months for treatment, that’s a healthcare crisis.”

(3) “Time” is the government healthcare killer. As Mick Jagger once sang, “Time is on Your Side.” Nothing else turns people against the government takeover of healthcare than the realistic expectation that it will result in delayed and potentially even denied treatment, procedures and/or medications. “Waiting to buy a car or even a house won’t kill you. But waiting for the healthcare you need – could. Delayed care is denied care.”

(4) The arguments against the Democrats’ healthcare plan must center around “politicians,” “bureaucrats,” and “Washington” … not the free market, tax incentives, or competition. Stop talking economic theory and start personalizing the impact of a government takeover of healthcare. They don’t want to hear that you’re opposed to government healthcare because it’s too expensive (any help from the government to lower costs will be embraced) or because it’s anti-competitive (they don’t know about or care about current limits to competition). But they are deathly afraid that a government takeover will lower their quality of care – so they are extremely receptive to the anti-Washington approach. It’s not an economic issue. It’s a bureaucratic issue.

(5) The healthcare denial horror stories from Canada & Co. do resonate, but you have to humanize them. You’ll notice we recommend the phrase “government takeover” rather than “government run” or “government controlled” It’s because too many politician say “we don’t want a government run healthcare system like Canada or Great Britain” without explaining those consequences. There is a better approach. “In countries with government run healthcare, politicians make YOUR healthcare decisions. THEY decide if you’ll get the procedure you need, or if you are disqualified because the treatment is too expensive or because you are too old. We can’t have that in America.”

(6) Healthcare quality = “getting the treatment you need, when you need it.” That is how Americans define quality, and so should you. Once again, focus on the importance of timeliness, but then add to it the specter of “denial.” Nothing will anger Americans more than the chance that they will be denied the healthcare they need for whatever reason. This is also important because it is an attribute of a government healthcare system that the Democrats CANNOT offer. So say it. “The plan put forward by the Democrats will deny people treatments they need and make them wait to get the treatments they are allowed to receive.”

(7) “One-size-does-NOT-fit-all.” The idea that a “committee of Washington bureaucrats” will establish the standard of care for all Americans and decide who gets what treatment based on how much it costs is anathema to Americans. Your approach? Call for the “protection of the personalized doctor-patient relationship.” It allows you to fight to protect and improve something good rather than only fighting to prevent something bad.

(8) WASTE, FRAUD, and ABUSE are your best targets for how to bring down costs. Make no mistake: the high cost of healthcare is still public enemy number one on this issue – and why so many Americans (including Republicans and conservatives) think the Democrats can handle healthcare better than the GOP. You can’t blame it on the lack of a private market; in case you missed it, capitalism isn’t exactly in vogue these days. But you can and should blame it on the waste, fraud, and abuse that is rampant in anything and everything the government controls.

(9) Americans will expect the government to look out for those who truly can’t afford healthcare. Here is the perfect sentence for addressing cost and the limited role for government that wins you allies rather than enemies: “A balanced, common sense approach that provides assistance to those who truly need it and keeps healthcare patient-centered rather than government-centered for everyone.”

(10) It’s not enough to just say what you’re against. You have to tell them what you’re for. It’s okay (and even necessary) for your campaign to center around why this healthcare plan is bad for America. But if you offer no vision for what’s better for America, you’ll be relegated to insignificance at best and labeled obstructionist at worst. What Americans are looking for in healthcare that your “solution” will provide is, in a word, more: “more access to more treatments and more doctors…with less interference from insurance companies and Washington politicians and special interests.”

In general these strike me as good tips. However, I am concerned by a couple things.

First, I'm leary that following these talking points too closely without explaining the economics behind the assertions will come across as too political, but maybe I'm wrong and all the ignorant folks out there will be swayed by personalized anecdotal arguments.

Second, you don't have to rest your entire argument on, or lead your arguments with economic theory, but it is important to educate people on the subject. Otherwise, you are just fighting a war of words with the Democrats. The key is to find ways to briefly yet convincingly put forth the economic arguments in a way that bolsters your overall argument and educates the public.

What is wrong with, for example, after explaining what single payer government-controlled health-care would look like, educating folks on why their health insurance premiums keep going up at 5 times the rate of inflation. I will attempt to do so briefly here. (well, it turns out to be not-so-brief, so this is a horribly bad example of what I was just saying, but please read on)

What if we purchased food the way we purchase health care? Your employer would provide you with a food insurance plan where you paid a $1 copay for every food item you bought regardless of its actual price. There would be no prices posted in the stores. In fact, it would be hard to find any employee in the store who could tell you how much any particular food item actually cost. When you asked them, they would look at you like something was wrong with you and say, "Why do you care, your insurance covers it anyway." Furthermore, if a grocery store sold you food that made you sick, you could sue the pants off them and a jury would award you $20 million, so they would make sure to only stock the shelf with the best produce possible, would throw away anything that even might be questionable, and would purchase massive amounts of liability insurance as well. What would happen to the cost and availability of food in such a system?

Well, with no price transparency, most people would go to the nicest or most convenient store and purchase whatever they thought they wanted/needed without regards to price. People would purchase more food than they would otherwise because the true cost is hidden from them at the point of purchase. The food insurance companies would enact clunky ways to try to keep costs in check (not nearly as effective as each consumer being careful to get the best bang for the buck with their own money) by putting maximum prices on each food item that the grocery store could bill them for and trying to deny insurance coverage to those who were purchasing the most food. The government would step in and either mandate the insurance companies cover the heavy food consumers or offer government food insurance for the uninsured. It would cost the grocery stores far more to stock the shelves with food items because they would have to factor in all the preventative throwing away of questionable food and the steep liability insurance.

Prices would soar steadily as all these inefficiencies ballooned the costs. Insurance companies would have to keep raising rates to stay in business, and employers would not be able to keep footing the entire bill for insurance, resulting in employees feeling the more visible pain of more and more being withheld from their paychecks to pay for insurance. While most people (at least those that have insurance) are satisfied with their access to and choices for food, they are constantly irritated by the rising insurance costs and worried about those who can no longer afford insurance.

So what is the solution? Should the government take over and provide universal food insurance for all? People would be tempted to support it because on the surface it appears less would come directly out of their pocket. Those who pay little or no taxes would be especially supportive since food basically becomes free for them. But has the government really done anything to decrease the overall cost of the system? No! In fact, by shielding more and more of cost from directly influencing consumer decisions, they will have exacerbated the cost problem as people take advantage of free (at least at the point of purchase) food. In order to prevent costs from exploding, the government will have to ration in some fashion the amount of food each person can have. They will start telling grocery stores they will only be reimbursed a certain amount for each food item. Each time the costs keep rising and government deficits increase, the government will ratchet down the amount they will reimburse for each food item. Grocery stores' profits will vanish. To stay in business they will start offering to sell some food types to those willing to pay with their own money, and will start refusing to sell to those with government insurance. Of course the government can not allow this and will mandate that no one can buy food outside the universal food insurance system. While people are demanding more food, stores are going out of business. Growing demand coupled with shrinking supply creates food shortages. At first people start growing hungry. If something is not changed soon, people will start starving to death.

Ok, so universal government-controlled food insurance is not a good solution. What's the alternative. How about returning to a market-based approach where prices do their job of most effectively allocating resources, coupled with governemnt assistance for those truly in need. This is exactly how food is purchased right now! Everyone pays full price for their own food, and government provides assistance to the needy through food stamps. (food is a bit different than health care in that just about everyone does need catastrophic health insurance to help with a major medical situation)

How do we get from here to there. In my food insurance example, you want to shift the price visibility back to the point of purchase. You want to post prices back on the shelves. You want to encourage employers to shift from footing the bill for food insurance to increasing the employees wages by a similar amount. This creates a vibrant insurance market with competition that keeps insurance prices down. Each person buys the right amount of insurance for them, instead of an inefficient one-size-fits-all approach of your employer deciding what insurance coverage you get (which may be less insurance than you want or more than you need). You want to limit lawsuit payouts to a fair and reasonable amount so that grocery stores do not need to spend vast sums of money on liability insurance. Now that poeple are faced with much or all of the true cost of purchasing a food item, they will spend their money much more wisely and efficiently than they spent the insurance company's money. With a more price efficient system in place, the reduction in insurance costs and taxes leaves plenty of room in the budget for the great majority of families to purchase all the food they need. Those who are less fortunate and truly need assistance are given food vouchers (food stamps) to purchase food like everyone else.

In health care, the policy changes should be:
  • Increase price visibility by strongly encouraging doctors to be able to provide patients with on-the-spot price quotes and/or a menu of prices for each medical procedure. For any medical service that in not an emergency, patients would be able to shop around for the best price/quality combination they were comfortable with. There is no reason that patients should be getting an MRI at one hospital for $2000 when a hospital 20 miles away, in some cases, may only charge $1200 for an MRI.
  • Increase the implementation of Health Savings Accounts which provide individuals with lower insurance rates in exchange for higher copays and deductibles, thus increasing the price at point of purchase. This will help prevent people from overburdening the system with unnecessary care. For all care that is truly needed, the patients will be willing to pay from the nest egg saved up in their HSA.
  • Revise the tax code to stop encouraging everyone to get their health insurance through their employer. Currently, health insurance is only tax deductible if provided through your employer. It doesn't make sense, and it's not fair to those who don't get their health insurance through their employer. Most employers do not provide you with car insurance, renters insurance, homeowners insurance, flood insurance, life insurance, or disability insurance. Some may provide some limited amount of those, usually for additional withholding from your paycheck, but none of those are tax-advantaged. Employer-provided health insurance is ubiquitous primarily because of the tax deductibility in the current tax code. The biggest problems with employer-provided health insurance are that it hides more of the true cost of health care (when all it really does is reduce your wages by the amount that your employer foot for health insurance -- you would be better off with the higher wages and purchasing your own insurance), and it is not portable between jobs (when was the last time you had to switch your car insurance plans when you moved to a different job). The deductibility also benefits those with higher incomes who are in higher tax brackets more than those with lesser incomes in lower tax brackets (someone in the 35% tax bracket with a $1000/mo. health plan gets a $350 tax break, while someone in the 15% tax bracket with the exact same $1000/mo. health plan only gets a $150 tax break) and encourages expensive gold-plated health plans with little or no copays, otherwise known as first-dollar coverage (an employer is more likely to provide a more expensive plan when they can deduct the cost of the plan from their taxes). John McCain had a very generous plan in the 2008 presidential campaign to replace the current tax deductibility for employer-provided health insurance with a $5000 refundable tax CREDIT for EVERYONE. That means unless you were in at least the 25% tax bracket AND your employer was withholding at least $1667/mo. for your health plan, you would have been better off with McCain's plan. I don't know what the exact numbers are, but I have to believe it would have been above 95% of people that would have been better off with the $5000 tax credit.
  • Cap the amount of pain and suffering damages (those above and beyond any medical costs that a medical provider is liable for because of a mistake) that juries can award to $250,000.
  • Reduce some of the mandates for insurance companies to cover stuff like sex-change operations.
  • Get the government out of the business of providing health insurance as much as possible and instead provide those who need assistance with "health stamps" to go buy their own insurance and/or health care.
  • No comments: