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GOP Worried Sick about Health Care

A Tuesday article in The Wall Street Journal highlighted the huge difficulties the GOP is having getting political traction from their passage of the Medicare prescription drugs bill. The idea of course was to steal a traditional Democratic issue by providing a new drug benefit for seniors through Medicare. The provision of such an expensive new entitlement, GOP strategists believed, would burnish Bush’s “compassionate conservative” credentials and immunize him against the charge he is only willing to spend money on the rich.

It hasn’t worked out that way. The bill was certainly expensive ($400 billion over 10 years, an estimate the Bush Administration increased to $540 billion after the bill was passed), but not because it was particularly generous. A senior with $5,000 in drug costs will wind up paying about $4,000 of that total bill out-of-pocket. The real reason for the expense was the GOP’s refusal to use the potential bargaining power of the government to hold the prices charged by powerful pharmaceutical companies. In fact, not only did the bill include no cost containment provisions, it actually made it more difficult for US citizens to buy their drugs from Canada, where drug prices are substantially lower.

All this, combined with structural changes to make it easier to move beneficiaries out of traditional Medicare into more restrictive HMOs (health maintenance organizations), has ensured the bill’s stunning lack of popularity, especially among seniors. For example, in an early January Gallup poll, 62 percent of seniors (compared to 53 percent among the population as a whole) said that the new presciption drug benefit did not go far enough. And in a December Gallup poll, seniors, by more than 2:1 (59 percent to 28 percent), thought the new Medicare plan will do more to benefit prescription drug companies than Medicare recipients.

Because of this poor reception, Bush’s approval ratings on health care, Medicare and even prescription drugs for seniors remain abysmal–in the 30's–and have barely budged since the bill passed. And those ratings are uniformly worse among seniors than among the population as a whole. Bush and the Republicans also continue to trail the Democrats by wide margins on questions about who can do a better job handling health care issues. That includes prescription drug benefits for seniors; the cost, availability and coverage of health insurance; and health care generally.

Perhaps the most serious point of vulnerability for the Republicans in this whole area is health care costs. Poll after poll shows that the most serious health care worry for voters is costs and that, in fact, concern about health care costs is either at the top or near the top of voters' economic worries. The general perception is that these costs are out-of-control and are more likely than any other factor to suddenly bankrupt or impoverish a family.

In this regard, the probable nomination of John Kerry by the Democrats deepens the Repubublicans' problems. Not only do they have nothing to say that seems remotely plausible about this problem, Kerry has quite a bit to say and most of it makes pretty good sense. You can read a description of his health care program here, which includes some very interesting cost containment measures.

Kerry, as you can see from the above link, is making a particular effort to target the "worried insured" which, in DR's view, is entirely the right approach. If health care plays a significant role in this election--and it should--it will be because the worried insured break decisively in favor of one of the candidates. Kerry wants to be that candidate.

To some extent, he may already be that candidate. Compared with Edwards, for example, he has talked more about health care and more explicitly targeted insured voters. And in every primary so far, he has done disproportionately well among voters who say their most important issue is health care (for example, 62 percent to 25 percent for Edwards among Virginia health care voters).

It must have seemed such a brilliant stroke to the Republicans when they rammed that Medicare bill through the House. Reality, alas for them, has gotten in the way.

Comments

It's always good strategy to argue that American companies aren't ingenious enough or competetive enough to deal fairly with consumers. American industry is too stupid to negotiate rules!

And of course the world is as Jeremy claims -- for example, when car companies had to start putting in seat belts, air bags and emissions systems, cars just became too expensive for anyone to buy. Oh, maybe that's not a good example. Let's see, I'm sure there's some evidence showing that no drugs will ever be approved again and all the people will die if the Democrats' plan is put into law -- any? any?

I'm glad people are talking about health-care and drug costs as much as insurance itself. The costs have gotten out of control in this country, and talking about doing better insurance coverage is impossible until you solve the root problem.

Jeremy writes:
"The best policy would to demand other countries, at least rich countries, to pay their fair share of drug costs."

No need to confront other countries. Just allow free trade. Free trade should not be only for Enron and Halliburton, you know.

Reimportation and gray market in med drugs will force Big Pharma to set much more uniform prices accross the world. Instead we have current rip-off approved by both parties where US elderly pay for drug research and development while Canadians, Frogs and others pay only marginal costs.

Call me crazy, but I think the GOP plan may work out for them politically (sort of).

As Ruy shows, it probably won't help them among the people who are really seriously concerned about health care. But where it will help is with the people who are vaguely concerned, but not really informed about the issue. To those voters, the GOP can say, "look, we care about health care, we passed this bill for health care." The bill may be a sham, but lots of voters won't look deep enough to see that.

Just a little note:

The majority of drug companies' spending these days goes towards marketing their drugs, not developing them. I don't have the numbers on hand, but they are frightening.

Also, essentially every vaccine has been created, from what I know, in a non-profit, government or foundation setting. For profit medicine automatically has a bias against cures, and for treatments, because treatments provide a greater cash return than cures do. I'm not arguing any sort of grand conspiracy, it's just how capitalism works in medicine.

Had the Republicans forged a good, logical, solid Medicare bill it would have helped them. They were looking for a slap-dash way to say they did something, and bum-rush the stage of public opinion.

For some really strange reason they weren't expecting people to care about the details, another thing that puzzles me about this particular batch of nutty GOP'ers. I don't know how Bill Frist can look people in the eye and say that absent negotiation, market forces will magically ensure lower drug costs. Perhaps he's rich enough not to look for multiple bids–the rest of the country is not.

Compare welfare reform to this bill. Welfare reform was better thought out, had elements tested in the states, and was therefore successful. The Medicare bill has nothing supporting it but GOP ideology. That seniors are running from it makes perfect sense.

For Karl Rove, it's a political triumph. For the lobbies, its return on investment. But under a second Bush Administration, the human cost of this bill could, to paraphrase Grover Norquist, forever take down the "pillar" or GOP fiscal competency.

Medicare and Social Security are not welfare - therefore reforming them is not a simple task of triangularization as it was with Clinton. Clinton was able to achieve his desired political effect because the majority of the people who were directly effected by welfare reform do not consistently show up to the polls on election day. In other words his reform package was not aim at direct consumers of the policy, rather it was aimed at people who typically would not make use of this type of entitlement program. If the policy reforms did not have the particular desired effect it was not likely to hurt Clinton in the polls because it would not, existentially, effect the typical voter. Not true of Social Security and Medicare.

Everyone anticipates using Medicare or Social Security. If not now then at some point in the future. As a result any reform of these policies will be given much more scrutiny - therefore reform is a much more politically risky move. When the Republicans moved into this territory they anticipated pulling a "Clinton" on their rivals, unfortunately for them, arrogance precluded them from governing wisely. Actually, it could have worked if they made more modest reforms with regards to HMO Transitions and not given so many handouts to the Pharmacutical Industry.

I think that 9/11 will ultimately be the undoing of this adminstration. President Bush won with less than 50% of the vote and as soon as he got into ofice he took a hard right. Since 9/11 he has been governing like he has a mandate. The Republican party has acted like listening to the Democrats is treason to their own partisan world view and 9/11 seems to have emboldened this attitude. It really is a case of political huberous - we will see come November.

I'm going to change the subject even though that violates protocol. I've been reading Kerry's blog and he did it. He did boink an intern. Jesus H. Christ. I'm sorry. I know his sexlife shouldn't be an issue, but it will be. Are we actually going to nominate a candidate who will have to spend the entire campaign rationalizing his sexlife? So much for Mr. Electability. Well I'm glad it's coming out now.

What was that first post from "laura" about Kerry "boinking an intern" and her finding out about it on the Kerryblog??!?!?! I don't think so. I smell Troll. But from where? Deanolia? Naderstan? or the Bowels of Roveland itself? Welcome to another episode of "Who Wants to be a Mega-Liar?".....

Wait a minute. Kerry was single. He was well known to have dated a number of women during his earlier senate days. Nobody will care. This is much less explosive than the Clinton affair, and Clinton had a 60% approval rating on THE DAY HE WAS IMPEACHED. This is not an electability issue.
I am a Dean supporter and would love to see Kerry go down sooner rather than later, but this issue is just plain stupid.

Looks like I am wrong, the alleged affair was in 1998 so he would have been married.
Like I said though, this didn't hurt Clinton's popularity much, and there is no evidence that anything went on here other than a pretty girl dropping off a resume.

From the referenced speech for Kerry's health plan. How is this not corporate welfare? And how do we save money if our taxes pay for this? Didn't read past this, so maybe I missed somehting, but this seems like a plan Bush would propose.

"Right now, only four out of every one thousand insurance claims deal with health care costs over $50,000. Insurance companies, however, end up spending a fifth of their expenses paying for these very few cases. If they're spending that much, you can bet everyone else's premiums are going to go up. Under my plan the government will pick up most of the tab for these expensive cases - and the premiums for middle-class families will go down. "

I'm not sure who laura is but isn't it strange how easy it is to get off topic. Medicare reform is an issue that can really help the dems this year: it is timely and it appears that seniors and the public at large do not like what they are seeing so far. Laura's post, however, shows how easy it will be for the repubs to use dirty tricks and culture wars to keep the public discourse focused on the most base topics.

Lets keep our eye on the prize.

Anyone have some insights on Medicare reform?

Addemdum: thanks David we must have been posting at the same time.

Karl said:
"Just a little note:

The majority of drug companies' spending these days goes towards marketing their drugs, not developing them. I don't have the numbers on hand, but they are frightening...."

Excellent INFORMED post.

Health care isn't just a health care issue anymore. Health care has increasingly become a huge economic issue. The US is spending around 14% of GDP on health care. Most industrialized countries are spending between 8-12% for universal coverage. This disparity effects the competitiveness of American industries and has a huge impact on employment. One of the reasons for the "jobless" recovery is the reluctance of businesses to add additional employees because of health care costs. Businesses have an incentive to work existing employers more hours rather than hire additional workers.

I have been waiting for years for some bright candidate or leader to point out these facts. At some point business will have an economic incentive to support universal coverage with strong cost controls rather than continue to pay for the "cost shift" from the outrageous levels of uncompensated care. Does anyone have any bright ideas on how the Dems could use these realities this year?

It seems obvious to me that from the standpoint of making the economy function efficiently, we don't want our citizens choosing jobs based on whether they offer adequate, or any, health insurance.

For the life of me I don't understand why small businesses--which have such difficulty attracting and retaining talent because they can't afford to offer decent, or even any, health insurance--don't rise up and rebel against their ideologically hidebound lobby in Washington, the National Federation of Independent Businesses (NFIB).

The NFLB has no ability to distinguish between government interventions that are harmful to their constituents vs. those that are helpful.

I suppose if one believes as they do that there is no such thing as a government intervention that is or could be helpful to their constituents (other than whatever small business subsidies they are able to obtain, of course) then this reduces the need to do much thinking or analysis about the question. Which probably cuts down on staff costs.

An acquaintance of mine is a small business owner in eastern Washington state. Using the above points as a thrust she responds highly positively to my argument for a single payer approach. Yet she is a Bush supporter!

The Republicans have tried to persuade education employees that their unions are not representing their best interests in Washington and the statehouses. Maybe we should explore doing this with small business owners and their Washington lobby.

Obviously we would not need to do so by advocating for a single payer approach, as the overwhelming view seems to be that such an approach--whatever its potential merits on policy grounds--is a political non-starter.