Democracy and Power 108: Obfuscation

Wherever politics intrudes upon economic life, political success is readily attained by saying what people like to hear rather than what is demonstrably true. Instead of safeguarding truth and honesty, the state then tends to become a major source of insincerity and mendacity. —Hans F. Sennholz

The Government is a Major Source of Insincerity and Mendacity

William Voegeli, author of Never Enough: America's Limitless Wellfare State, has written an excellent article, Bait-and-Switch Liberalism. Voegeli explains how politicians know Amercans want additional government services, and so the politician exhorts the benefits and ignores the burdens. The American public eagerly accepts what they like to hear rather than what is demonstrably true.

Voegeli explains how President Obama sold the American public on ObamaCare – universal and improved insurance coverage, minimal cost and reducing the deficit:

“What people wanted to hear was that the higher purpose of guaranteeing “quality, affordable health care for every American,” to use Obama’s words, could be had easily and painlessly. And it turned out that this historic goal was surprisingly attainable. “Most of this plan,” the president told Congress in a September 2009 address on health-care reform, “can be paid for by finding savings within the existing health-care system, a system that is currently full of waste and abuse.” Giving millions of uninsured Americans health insurance, and improving coverage for millions more who already had insurance, not only wouldn’t increase the federal deficit, but was “a step we must take if we hope to bring down our deficit in the years to come,” Obama had explained earlier that year.”

Citing a MIT economist, the White House claimed savings for individuals and small businesses. Voegeli reports:

“A November 2009 post on the White House blog cited research and congressional testimony by MIT economist Jonathan Gruber (a health-care adviser to the administration) to share the glad tidings that the legislation taking shape would unleash a torrent of benefits. The bill being considered by the House would lower premiums for individuals while improving coverage, according to Gruber. Small businesses, too, had “little to fear, and much to gain, from health reform,” since the money it saved them would lead to hiring more workers and increasing their take-home pay.”

Today, the American public is comprehending what was demonstrably true – ObamaCare is very expensive for almost every American. In January 2014, Gruber reports in the Washington Post:

“The law isn’t designed to save money. It’s designed to improve health, and that’s going to cost money.”

Classic Bait-and-Switch, obfuscation has unfortunately been part of government for a long time. Democrats and Republicans are both guilty of it. ObamaCare is an unusual situation because the insincerity and mendacity by our government and the awareness by the American people have occurred within four years. So, most of the representatives and senators that perpetrated this insincerity and mendacity remain in power. The elections of 2014 and 2016 will test American's concern over government's source of insincerity and mendacity. Is America outraged? Is America indifferent? How American voters react will have a major impact on our future freedom and democracy. Without trust in government, society declines – culturally, economically and civilly.

The South Carolina Senate is taking up an extraordinary bill this week, H 3101, that (with an amendment) would be a model for state resistance to ObamaCare. The underlying bill was in need of strengthening, so Senator Tom Davis has offered an amendment that would make the bill airtight. The bill would, for all intents and purposes, nullify ObamaCare in South Carolina, using a Supreme Court-approved procedure called "anti-commandeering".

The bill, with the vital Davis amendment, would:

• Stop any state or local government official from cooperating in any way with the federal implementation of ObamaCare.

• Prevent the above agencies from applying for or receiving any of the federal grant money under ObamaCare unless approved by the legislature, going so far as to prohibit each grant program by name.

• Require the ObamaCare Navigators to register with the state and pass a background check (which is not required under the federal law).

• Specifically prohibit the state from either accepting the Medicaid expansion or from establishing a state-run health insurance exchange under ObamaCare.

The Davis amendment has achieved strong support within the South Carolina Senate, and ought to be on its way for an easy passage. Unfortunately, a few Republican senators could be the only thing between South Carolinians and a historic declaration of health care freedom. No doubt one factor that has confused the issue for some of these senators is that the powerful South Carolina Chamber of Commerce has entered the fray - on the side of ObamaCare.

What is most disconcerting about the Chamber's involvement is that its self-declared mission is "to prevent anti-business legislation and regulation". Yet, this supposedly pro-business organization is working to save ObamaCare, a law which is putting business owners in a vice, forcing them to cut hours and workers and drastically raising their insurance premiums.

South Carolina citizens must stand up against corporate lobbyists and reluctant Republicans and demand that H 3101 be passed with the Davis amendment attached. SC residents can Take Action by clicking below:

Fewer and fewer doctors in the US are self-employed, and more employed by hospitals. That is a direct result of government policy, sharply accelerated by Obamacare. The trend will be damaging to American health care. It is still possible to reverse the decline, but powerful forces want it to continue.

A Foolish And Dangerous Paranoia

Doctors effectively can't own new hospitals any more. That's because the Big Hospital lobby convinced the leftists who designed Obamacare that physicans owning hospitals was a conflict of interest. That's right: according to that theory, the people who have devoted their lives to the study of medicine want to own hospitals so they can profit by withholding care, or by overcharging for it.

The trouble with that line of reasoning is that the non-physicians in charge of hospitals and insurance companies have no such conflict. Their incentives are to provide as little care as possible while charging as much as they can. Their desire to protect their personal reputations and adherence to ethical code are not as strong as for physicians.

If you could invent the kind of person to run a health care business, you would invent a physician.

To reverse this, repeal Obamacare.

The Costs

While half of all physicians currently work for independent practices, three of four doctors hired this year will go to work for hospitals, according to one study.

As Dr. Scott Gottlieb wrote last year, hospitals are on a buying binge:

Doctor practices are being acquired at a rapid clip. While some physicians are choosing to sell their practices to integrated delivery systems that are provider led, the majority of doctors are selling their practices to hospitals.

This should have everyone concerned. For one thing, there’s ample evidence that provider productivity declines when doctors become salaried employees of hospitals. (Some selected research, analysis, and commentary of these trends can be found here:A, B, C, D, E, F, G, H) 

In less urban areas, the hospital and high school can be the largest employers. That leads state and local governments to give them preferential treatment to preserve the jobs associated with them.

Dr. Jason Fodeman of the Galen Institute lays out the question. Will doctors working for hospitals lead to lower costs, or higher?

The Medicare Payment Advisory Commission (MedPAC) says that the trend toward hospital-employed doctors may drive up costs because care that was once billed as physician visits will be billed at higher hospital outpatient rates—even when they occur in the same location. In addition, many hospitals charge facility fees for visits with doctors in their system.

Explicit higher charges for seeing a physician in a hospital are one thing, but the real issue is the incentives doctors employed by hospitals face. As employees, they will be less efficient, subject to the bureaucratic pitfalls present in all organizations. 

According to Dr. Keith Smith of the Surgery Center of Oklahoma, Medicare and other insurance billing issues involve bigger legal hassles for the self-employed doctor. Self-employed physicians have to comply with Medicare and Medicaid regulations, if they accept those patients, and simply filling out the forms incorrectly can lead to criminal charges. Doctors employed by hospitals don't have that worry: their organization may have to pay a fine, but no one goes to jail. 

But even if doctors don't take Medicare and Medicaid patients, Obamacare pushes on them more regulations. Medical practices also have the same issues as other small businesses, which are holding back hiring and changing  because of the law.

As The American Interest notes, despite the Obamacare sales rhetoric of lowered costs, hospital bills will be going up:

On the surface, doctors taking on salaried jobs at hospitals might seem like good news for health care costs. One driver of health care inflation is the “fee for service” model, which gives doctors an incentive to deliver the maximum feasible number of billable services per patient. Salaried positions, on the other hand, are supposed to keep down costs, because you get paid the same no matter how many tests you order.

It isn't the fee for service (FFS) model in itself that is the problem, but third party payer in conjunction with it. Taking the decisions about price and service out of the hands of doctors and patients and turning it over to actuaries and bureaucrats will not lower costs, but increase them.

Rather than ditching FFS, we should be deemphasizing third-party payer (like Medicare, Medicaid, and typical health insurance) and instead allow people to pay directly for normal and routine medical care, perhaps with their Health Savings Accounts.

New Coding, Same Control

On top of everything else independent physicians face, the government is pushing a new medical coding system called ICD-10. Independent of Obamacare, it's part of the general regimen of price controls forced on doctors by the health care industrial complex. 

A new AMA study indicates ICD-10 will cost on the order of a physician's yearly pay for a practice to implement:

The study, an update of research published in 2008, predicts that small practice costs will range anywhere from $56,639 to more than $226,000. Medium practices, it estimates, will pay between $213,364 and $824,735 for implementation; costs for large practices are predicted to run between $2 million and $8 million.

It's always the same with price controls, whether from insurance companies or governments. When limits are set on prices for products, people selling those products relabel them something else, often resulting in a cat-and-mouse game. Shortages, black markets, and higher overall prices are the inevitable result.

The health care establishment is trying to "reimagine" the field of medicine, to change the role of doctors, asking them to reengineer their practices to work with the governmental, insurance payment models, and electronic systems being developed. Instead, those systems should be eliminated or built around the relationship between the patient.

If we continue down this road, doctors will cease to enjoy the level of public respect they currently have. Along with that lack of respect will come lower pay, and increased treatment of physicians as mere objects to be plugged and played like so many robots on a shop floor.

The problem, as always, is state control. The answer, as always, is freedom.

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There is a myth in politics that elections are won and lost in the middle. The premise is that "independent" voters support tenets of both major political parties and candidates must craft their message to attract a majority of these "moderates." Despite the fact that nearly twice as many Americans self-identify as conservative as compared to liberal, conservatives are often referred to as "extremists," or worse.

Prominent political operatives write op-ed pieces proclaiming that Republicans win elections by ignoring the base of their party and that sticking to your principles is a "self-defeating strategy." Yet, these same political operatives commission polls whose results state the opposite to be true.

One such poll was commissioned by a mainstream Republican advocacy group in early June of last year. Several months before millions of Americans discovered that their health insurance premiums and deductibles were set to skyrocket in 2014, nearly two thirds of Republicans, Democrats and Independents alike told a pollster that the top priority of health care policy should be reducing the cost of health care.

Before the defund debate had begun and Senator Ted Cruz stood for 21 hours to implore his U.S. Senate colleagues to defund Obamacare, a cool two thirds of Republicans and Independents told a pollster they wanted Congress to take whatever steps possible to "dismantle" Obamacare now.

The most startling fact of all: when asked whether people should be allowed to purchase insurance across state lines, more than 75% of Democrats, Republicans and Independents agreed. In fact, the greatest agreement was seen among Independents, a cool 85% of whom do not want the government restricting their choice of health insurance.

This brings up a larger point. A record 42% of Americans self-identify as Independent rather than Republican or Democrat because the major political parties do not advance policies that are important to those voters. As an example, while few agree that our present immigration system is ideal, Republican and Democrat politicians press the immigration debate despite only 3% of Americans viewing immigration as the most pressing issue of the day. It is no wonder that pollster Frank Luntz suggested that the most effective political soundbite of 2013 was one where Senator Ted Cruz observed that the President and Congress are not listening to the American people.

In the aftermath of the 2012 election, a prominent Republican political operative suggested that Republicans could regain their political swagger by deploying an "army of computer engineers, mathematicians and social scientists" as the Obama campaign had done to mine electoral data and achieve electoral success. The creation of Para Bellum Labs within the Republican National Committee would seem to indicate that the RNC has heeded this operative's advice.

As a mathematician, I would suggest that the answer is much simpler. Do not target voters, target the message they are sending. When three fourths of the voting public tells you something, LISTEN!

Republicans should offer a simple alternative to Obamacare. Suggest that if you elect us in 2014, we will allow you to buy whatever health insurance plan you want, wherever it is offered, and we will not punish you if you choose not to purchase anything at all. Pass a one page bill out of the House of Representatives and offer it up in the United States Senate with every Republican Senator as a co-sponsor. Take a clear unadulterated stand and follow through! Freedom works!

Conservatives were excoriated during the defund debate last fall as being outside the mainstream. It was a question of tactics we were told, notwithstanding the fact that those doing the questioning were sitting on polling data stating that they ought to have been following the conservatives. It is no wonder that a recent Freedomworks poll found nearly half of its respondents listing health care as a top concern.

The Obama administration told Americans recently that it is "good news" that they will have the "opportunity" to work less as a consequence of Obamacare. Only in a dystopian Orwellian fantasy is more unemployment "good news." By that economic scorecard, Washington should be celebrating with parades every month! 

Washington is not listening to the American people. If Republicans are not proactive in fighting our decline into dystopia, their political fortunes will get sucked into its vortex.

I don’t want to shock our readers but, occasionally, liberals can be inconsistent. They can be, if one dares use the term, hypocritical. This latest example came to my attention as I was researching a recent piece on the case the Supreme Court is hearing with regards to unions. 

The issue, in short, is this: there are those who do not want to be forced to pay union dues, while the unions say they must. The union rationale is that a worker benefits from union negotiated wages and conditions, so it’s only right that he or she pay the dues.

The unions call this, in true liberal euphemistic fashion, the “fair share provision.” It is thought that, should dues paying become optional, there would be a disproportionate financial burden on those who choose to pay union dues. But apparently, progressive objection to subsidizing the benefits of others doesn’t translate to other situations.

Take Obamacare, for example. How does this “fairness” apply to that darling of the left? On the surface, it translates perfectly. Everyone is forced to pay for something they may or may not want, in order to finance the benefits of everyone else. This is another case of fairness above choice because our liberal overlords have decided that it is in our best interest. That, however, is as far as the correlation goes because, in reality, everyone does not pay in. 

Obamacare waivers are given out like Mardi Gras beads to those who most enthusiastically flash their support in public. Ironically, this includes unions- the very groups that believe everyone should chip in for the greater good have managed to get out of doing exactly that. 

Should the unions wish to be ideologically consistent, I have a a suggestion. Perhaps they should take a page from Obamacare and give waivers to those who actually love their union (and would choose to pay dues), thus only collecting dues from those who have no wish to join. Easy peasy. 

Conservatives were right to warn that Governor John Kasich’s embrace of the Obamacare Medicaid expansion would increase government spending and hurt Ohio’s labor force, a February 4 Congressional Budget Office (CBO) report affirms.

States still being pressured to take "free" Medicaid expansion money from DC should learn from Kasich's mistake.

Of exploding federal spending, CBO wrote, “The increase in outlays reflects substantial growth in the cost of the largest benefit programs — Social Security, Medicare, and Medicaid — and in payments of interest on the government’s debt; those increases would more than offset a significant decline in discretionary spending relative to the size of the economy.”

The Obamacare Medicaid expansion will cause damage beyond further busting DC’s budget, as The Buckeye Institute, Opportunity Ohio, Media Trackers, Foundation for Government Accountability, and others explained while Kasich, a Republican, tried to ram the policy through Ohio’s legislature.

“CBO estimates that expanded Medicaid eligibility under [Obamacare] will, on balance, reduce incentives to work,” the nonpartisan budget office opined, citing a National Bureau of Economic Research (NBER) working paper Media Trackers called attention to last summer.

CBO listed “expansion of eligibility for Medicaid” as the second most important Obamacare provision affecting the nation’s labor supply.

“In particular, studies of past expansions or contractions in Medicaid eligibility for childless adults have pointed to a larger effect on labor supply than CBO had estimated previously,” CBO wrote.

The left-leaning Urban Institute has estimated that 90 percent of Ohioans eligible for Medicaid under the Obamacare expansion will be able-bodied childless adults, a point The Heritage Foundation’s Ed Haislmaier made during Ohio House testimony last spring.

Heritage, like every other right-of-center think tank, was ignored by the Kasich Administration and by the state’s rabidly pro-expansion press.

CBO’s February 4 report also discredited assurances from Gov. Kasich that Medicaid expansion is separate from Obamacare and that Ohio would save taxpayers no money by refusing to expand Medicaid.

“Medicaid spending is expected to accelerate in 2014, because about 25 states have expanded coverage significantly in keeping with provisions of the Affordable Care Act,” CBO wrote.

Elsewhere in the report, CBO noted that new estimates did not take into account any “decisions by states about expanding Medicaid coverage” since last December, an acknowledgement that Obamacare’s increased Medicaid costs rise with each state that enacts the expansion.

Media Trackers has sought to explain this simple fact to a seemingly indifferent press since last February. Cato Institute health policy expert Michael Cannon refuted Kasich’s position in March 2013 testimony before the Ohio House, but the media chose to ignore him.

The left-leaning Kaiser Family Foundation’s cost projections from 2012 — and a direct quote from last March — also affirm that Kasich’s talking points are false, but Gov. Kasich continues to misrepresent how the new entitlement benefits will be paid for.

See a list of other findings from the CBO report that are not so much revelations as confirmations of years-old conservative warnings about Obamacare.

This story was originally published at Media Trackers.

Obamacare has been a drag on the US economy so far based mostly on uncertainty and on businesses preparing to comply with its various rules, mandates, penaties, taxes, and fees. But a new report from the CBO shows that the law will trap people in unemployment and cause higher deficits, piling onto the national debt while lower tax receipts make it harder for the government to repay.

There is no way to fix the flawed design of Obamacare.  Since its subsidies for insurance companies are inversely proportional to the income of their customers, dropping off as it rises, Obamacare will inevitably convince people to turn down work to keep their insurance. In case it's not clear, that's not good.

To be specific, the nonpartisan Congressional Budget Office says that Obamcare will cause up to 2.5 million Americans to be unemployed by 2024.

Those aren't jobs lost, exactly, but that's not to say it's a good thing. The jobs may still be there, at least for a while, but in a sad twist of bad policy, 2.5 million Americans will see themselves unable to take those jobs, or be convinced that they should not. Over two million people will see their dreams put out of reach, their will to succeed sapped, their working lives cut short by a warm pit of pleasant-looking quicksand. 

Once again, we see government policy encouraging income inequality, while those who claim that inequality is the defining challenge of our time applaud. The income inequality will persist for generations, unless Obamacare is fully repealed.

It's not "job lock," where a person is locked into a job to keep insurance. It's more like being locked out of the labor market altogether: a job lockout.

That problem is especially acute since other government programs like SNAP, housing assistance, and the Earned Income Tax Credit also cut off as income rises. Obamacare makes the Work vs Welfare problem even worse than before.

Avik Roy noticed something else, that the CBO estimates economic growth will be slower:

Because of this slower economic growth, CBO projects that from 2014 to 2023, the federal government will receive $1.4 trillion less in tax revenue than it had projected last year. As a result, “CBO now estimates that the cumulative deficit for the 2014-2023 period…would be about $1.0 trillion greater than it projected in May [2013].”

So that's another $1 trillion added to the debt our generation will be leaving for the next. There will be another trillion added to the debt, with millions fewer unable to work to pay the taxes needed to pay it off, while those millions more are trapped in government dependence. 

It's all so unnecessary. America's employer-based health insurance took off because of wage and price controls in the 1940s: companies could offer health insurance, but could not offer higher wages. Since the benefits are tax-free, companies have been able to use the health insurance benefit as a way to compete for employees.

Via Twitchy, Martha McCollum asks a simple question:

Lemme get this right: companies used to incentivize hard work with benefits, now the govt discourages it with benefits?

— martha maccallum (@marthamaccallum) February 5, 2014

It's a policy run amok. Even the US Chamber of Commerce, which has been warming to Obamacare, noticed the problem. Obamacare will sap from people the will to succeed, providing not a safety net, but an inescapable hammock.