Thom: The whole issue of health care, this is starting to get very, very complicated, and we’ve got some members of Congress who, obviously we’ve got some members of Congress who are just playing weasel on this. The Republican National Committee has issued a memo saying basically use any means necessary to slow this down, the theory being the longer that they can slow it down, the more the health industry can drop millions and millions of dollars into television advertising and right-wing talk radio can pound, pound, pound away at this thing, to get people to call their members of Congress and so on, and push people away from a public option in a national health insurance programme, or a national health care programme. And there is a difference between health care and health insurance.

On the other hand, I had a conversation this morning, on AM 620 KPOJ, where I was filling in, all this week I’m filling in for Carl Wolfson from 6 to 9am, Portland time, with Congressman Peter DeFazio, who’s one of the very best progressive members of Congress. A good guy, who I have a lot of respect for, who’s been on this show a number of times.

And his concern is that the public option that's being discussed would be payments, reimbursement payments, would be based on Medicaid payments, and his point is that Medicaid reimbursement is a crazy quilt, patchwork across the various states, that in New York state and in Florida for example, doctors taking Medicaid get very healthy payments, thank you very much, because in part the amount that a doctor is reimbursed is based on the local cost of doing business, and in fact, it goes back to the 60’s, it was based on the cost of a two-bedroom apartment in the 1960’s. That’s how they calculate what the doctor can add to his charges for rent. And, today, those prices have gone up dramatically in New York and Florida, but not in Oregon. And so Medicare docs in Oregon are getting very little compared with Medicare docs in New York and Florida, and a lot are simply opting out of the programme, and so here we’ve got a very progressive Congressman saying wait a minute, slow this thing down, let’s do this right, which gives me pause.

And then, Steffie Woolhandler, she’s with Harvard University, a progressive, this is from the Institute for Public Accuracy, a progressive think-tank. She says, “As Washington politicians climb on-board a Massachusetts-style health reform, Massachusetts healthcare sinks. Congress seems poised to include an individual mandate in health reform, copying Massachusetts.” She says, “Here," in Massachusetts, "beating your wife, communicating a terrorist threat and being uninsured all carry $1,000 fines. ... But reform hasn't made care affordable for middle class families, or for the public treasury.” She says, “A middle income uninsured 56-year-old is now forced to lay out at least $4,800 for a policy with a $2,000 deductible before it pays for any care, and 20 percent co-payments after that. Overpriced, skimpy coverage like this left one in six Massachusetts residents unable to pay their medical bills last year.” Meanwhile, health care costs continue to explode.

So, stepping into this, Marc Goldwein is with us, newamerica.net is the web site. He’s the policy director of the Committee for a Responsible Federal Budget, Senior Policy Analyst, the Fiscal Policy Programme, the New America Foundation. Can I appropriately call this a Conservative think-tank, Marc ?

Marc: No, not by any means. We’re a… the Committee for a Responsible Federal Budget is very bi-partisan. We have Democrats and Republicans on our board.

Thom: Ok, and you are advocating that we should have not just a government bureaucracy between us and our doctors, but also an insurance bureaucracy between us and our doctors, if I understand this correctly.

Marc: What we’re saying is that you can do health reform, and there is a lot of things that you can do to fix the health system, but the focus needs to be on reducing cost, and slowing long-term health care cost growth. If you don’t get those costs under control, anything that we do on coverage isn’t going to matter in ten years, because we can’t afford it anyway. And secondly, whatever we do on health care, we need to be willing to pay for, so that means we need to have higher taxes or lower spending elsewhere.

Thom: But your prescription is for universal insurance through private, presumably for-profit or not-for-profit, insurance companies. Do I have that right ?

Marc: The Committee does not have any position on what health care reform should look like. Our main focus is on costs, and on how you pay for it.

Thom: So, how do you change costs, and how do you pay for it ?

Marc: Well, the first thing that you need to do is you need to look at our current delivery systems, to look at our payment structures, and to see that they’re out of whack. Right now, we’re paying doctors more money to do more procedures at hospitals. We’re not paying them more money for better outcomes.

Thom: Sure. So we want to look at the Mayo Clinic model which works, as opposed to the, going back to this New Yorker article, as opposed to the model down in Texas where the doctors own their own imaging centers, and gee, what a surprise, they’re sending a lot of people for x-rays.

Marc: Yeah, I mean, you know, it’s not so simple. We don’t really know how to cut out all the waste in the system, but certainly the Mayo Clinic has excellent results at low cost.

Thom: At half the costs. They’re running around forty-five, forty-six hundred dollars a person if I remember the article correctly, it's been a few weeks since I read it, versus over nine thousand dollars down in Texas. Have you read the article that I’m talking about ?

Marc: Yes, I have. I don’t know the numbers, but the Mayo Clinic is able to provide excellent health care at a very cheap cost. And we find that other places in the United States, and in other countries, but of course, when we’re restricting costs, we’re making certain decisions about what procedures we’re willing to pay for.

Thom: But isn’t the largest problem here, Marc Goldwein, that we have between us and our physicians right now, private for-profit companies that are skimming anywhere from twenty to fifty percent of all the money off the top, so that they can pay their CEO’s millions and millions? If you took the pay, for the top ten CEO’s of the top ten health insurance companies in the United States, if you just took that pay, and the top one makes over twelve million dollars a year, if you took the pay of those ten CEO’s, you’d have enough money to provide a full year of health insurance for a hundred thousand people, based on the cost of health insurance in France. I mean, this is crazy. Why do we have these leaches on our back ?

Marc: Well, in part we have insurance companies because we as a country are encouraging the creation of a system of employer-provided insurance, because of our tax code. But, I don’t think it’s fair to say yes, administrative costs and profits are very high in the private sector, because the French are by no means perfect, there is plenty of waste and abuse in Medicare.

Thom: Medicare is delivering services at three percent overhead.

Marc: At three percent by the dollar, not necessarily three percent by the patient. So, seniors are a lot more expensive to cover.

Thom: Well, of course they are, but they are for private insurance companies. They just drop them.

Marc: That’s absolutely true, and the private sector obviously doesn’t have all the answers. But I don’t think we should dismiss its role out of hand, especially in advancing medical technology.

Thom: No, I’m all in favor of, you know, a private company making my x-ray machine, but, you know, it seems like most of the companies that make these things are based in Germany. Siemens is one of the largest producers of imaging technology in the world. We’re certainly not making these things in the United States. I’m not sure what that has to do with the debate with how we fund health care in the United States.

Why is that we’re paying about twice as much for health care as any other industrialized country in the world, or a little less than twice as much, and yet, most of these other countries are getting, the other thirty five industrialized countries, are generally quite happy, thank you very much, with the health care that they have?

Marc: That’s absolutely true, and part of the reason that we’re paying more is because we’re wealthier, and it’s sort of a general economic principle that as people in countries get wealthier, they demand more of the things they like. So part of it's apt, but that comes nowhere near to explaining the whole problem. We’ve a major insurance industry problem, and it’s partially because of the structure of the market. Insurance companies aren’t able to compete with each effectively because of the structures that we have in place.

We also have a lot of unnecessary, in fact over-treatment, so much that sometimes we’re treating people to the point where we’re killing them, instead of helping them. And I'd say, the third major point is something that we have to accept is the United States is where most technological advancements occur, and essentially, we fund that. We fund the advancement of medical technology.

Thom: But we’re funding that by, if you’re talking about pharmaceuticals, we’re funding that through the National Institutes of Health with our tax dollars, not our insurance dollars. And again, if you’re talking about medical imaging, most of that is not made in the United States, it’s made in Europe.

Marc: No, how I'm saying we're funding it is by...

Thom: And the American manufacturers, by the way, are doing their manufacturing in South Korea and Japan.

Marc: Essentially, we’re subsidizing the world’s technological advancement because companies who are profit-seeking will come to the US, will want to sell first in the US, because they know in the US they can get the best profits for medical devices, for drugs, etc.

Thom: Right, because it’s a free-for-all, it’s the Wild West. Shouldn’t we bring this under control ? We the people. I mean, shouldn’t we say that health care is part of the commons, just like our traffic lights and our streets are, and we’re going to have some control over this?

Marc: I think we could. I think reasonable people can disagree over the role of the private versus public sector in health care, but certainly if we are going to keep a private sector to the extent to which are keeping a private sector, it should be a properly functioning market, and that means all of our code regulations and tax subsidies need to be better fix that market so that it works right, and for the American people.

Thom: Yeah. Well, as a generality, I can’t disagree with that. Marc Goldwein, the Policy Director of the Committee for the Responsible Federal Budget at the New America Foundation, newamerica.net. Marc, thanks for dropping by today.

Marc: No problem, thanks for having me.

Thom: Good talking with you.

Transcribed by Gerard Aukstiejus.