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Wednesday, August 19, 2009

I am beginning to worry

One of the things that really impressed me when Barack Obama was running for the nomination, and again when he was running for president, was his superb political instincts (with an occasional slip up). But in the last six months, that skill seems to have eluded him on two very important occasions.

But first, let's get some things straight. The overwhelming number of his cabinet appointments have been superb. I have major reservations about Eric Holder, but I will give him the benefit of a doubt.

His economic team is a complete disaster!! The Goldman Sachs gang that can shoot straight and the truly scary Larry Summer are simply awful. We describe all of that in our book, The Great Recession Conspiracy.

What is beginning to worry me is the incredible ineptness of his handling of the health care crisis. And it is a crisis. We are now spending 18% of our GNP on health care and the rate of annual increase shows we are on track to reach 30% in a couple of years. Forty seven million U.S. citizens do not have health care insurance and are using emergency rooms for their health care needs. If you do not understand there is crisis, you might has well stop reading here.

In addition, we get lousy returns for our health care investment. Our life span is significantly shorter than our European contemporaries and our infant death rate is worthy of a third world country, to name a few shortcomings.

So the fact that we need health care reform is beyond question. But how the Obama team is going about the job is simply unbelievably awful, and the results of that incompetence appear every day.

First thing, there is NO health care bill, period. There are three Congressional "discussion papers", and they are all different. Since Obama has no Health Care bill, he has to defend bits and parts of the three working papers that he has had no hand in creating. Hence, he looks like a complete fool defending ideas he doesn't even believe in. On the other hand, the opposition can pick tiny pieces of insanity out of this working papers and crucify Obama on each of them. See the wack job from Alaska for one, but just one, example. For another see Chuck Grassely babbling about health care in the U.K. about which he knows absolutely nothing. He is, otherwise, a pretty sensible guy.

But here is the real problem. Obama has got everything bass ackward. When you sort out the wack jobs, there are still real concerns among really sensible people about how he intends to pay for his proposal. He should have addressed that incredibly important problem before he went on the present his proposal, whatever that turns out to be. Here is what he should have said and done.

There are six, relatively, simple steps he could have proposed to pay for his plan before the fight about what was in the proposed health care bill began. He would have automatically enlisted support of the "blue dog" Democrats who are worried about the costs, among others.

1) Outlaw pharmaceutical advertising directly to consumers. $40 billion dollars are spent annually to promote "prescription only" drugs directly to consumers. That is simply a stupid waste of money that big pharma could save to off set other new expenses.

2) Address fraud in Medicare as it exists today. Nobody knows exactly what the real number is, but most everybody agrees its somewhere between $1 and $500 BILLION. One example: Numerous clinics have been found to recruit "patients" from around the country, and paying them cash, while the clinic bills for a wide variety of phony procedures.

3) Fund digitizing medical records. An large number of medical problems occur every day because hospitals do not have accurate patient records for each patient. Each of those problems have a significant, and unnecessary, cost.

4) Recently, controlled experiments have shown that hospital infections can be reduced by 95% with simple programs of hand washing, specifically designed procedures, sterile gowns and gloves, etc., and the cost has come out at $17 per patient!! And the savings are in the hundreds of thousands of dollars in each hospital.

5) Computer programs and analysis show the cost/benefit results of various procedures and pharmaceuticals should be funded immediately. The same procedures at the Mayo Clinic cost $100,000 more than if they were performed at UCLA Medical Center. Peter Orzag has started this project and it should be funded immediately.

6) 60%, 70%, 80%, 90% of our medical expenditure is spent on the last two weeks, two months, two years of life. You pick the combination of definitions that suits you, and the result is still the same, the majority of our health care expenditure is spent on end-of-life heroic procedures. A "living will" goes a very long way to avoid useless, heroic procedures and allows individuals to have a hand in final arrangements. I have a living will and everyone I know has one. Obama has one, but he has allowed the wacko jobs on the right fringe to hijack this very, very important issue and relabel it as "Killing Grannies".

Yes, I am beginning to worry that what will come out of Congress will be a counter-productive hash that will do nothing to solve the problem. Remember that every dollar spent on health care is a dollar that cannot be spent on education, repairing roads, invested in wind and solar power, and your own pet project.

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