The Great Disconnect

All across the country, Members of Congress are facing very angry constituents over the issue of health care. So ferocious has been the response that an estimated two-thirds of the Members are not even going to hold town hall meetings. Reportedly, our elected representatives are shocked.

I don’t know why. At least a month earlier, my colleagues and I at the National Center for Policy Analysis became aware of their anger as we collected more than 1.1 million signatures on the petition and read all their e-mail responses. Where, you wonder, were the politicians as this anger was boiling over? Don’t they have staffers who answer their telephones and open their mail?

Anyway, a great disconnect has emerged. It may be serious enough to cause the Democrats to lose control of the Congress in the next election. How did this happen? I think there are three causes.


You know you make me want to
Shout…..(come on now)…..
Shout…..(come on now)…..
Shout…..(come on now)…..

1.       Politicians who don’t know anything about health care.

As I have written before at this blog, almost no one on Capitol Hill understands health care as a complex system. Not only that, but the left wing of the Democratic Party thinks that the answers are simple. After all, other countries appear to have solved a lot of these problems. Why can’t we just copy what they are doing? Like the Hollywood crowd, these politicians think you do not need to understand complex systems in general or economics in particular in order to have strongly held public policy beliefs. These attitudes served them well (they at least got them elected) until it came time to legislate. At this point, technicians at the Congressional Budget Office (who actually do understand something about complex systems) told them their pipe dreams were pipe dreams. So enter the policy wonks.

2.       Policy wonks who do not understand the voters.

Over the past two decades, I have probably participated in several hundred inside-the-Beltway meetings on ways to reform the health care system. One of the almost unquestioned assumptions in all these discussions is that it is right, proper and desirable for the federal government to tell everyone in America what kind of health insurance he/she should have. In fact, most health reform plans are designed so that they won’t work at all if you can’t force people to buy a government-prescribed insurance plan. In these discussions, wonks on the right are almost as bad as wonks on the left. And all are completely out of touch with what ordinary Americans think.

3.       A very deceptive presidential campaign.

During the last election, Barack Obama, Hillary Clinton, John Edwards and just about everyone else running for president in the Democratic primary made these promises:

a.  Universal coverage (which sounds like helping 47 million Americans
     afford to buy health insurance);

b.  Paid for by taxes on the rich (which means to most people,
     “not me”) and efficiencies gained through preventive care,
     electronic medical 
records, etc.  (which sounds like “all gain,
     no pain”); and

c.  If you like the health plan you’re in (which 87% of Americans
     do) you can keep it (which sounds like “we’ll leave you alone”).

Most voters liked these messages. At the same time, they didn’t like what Barack Obama said John McCain would do:

a.  Cause millions of Americans to lose their employer coverage
     and be thrown into the individual market where premiums
     would be unaffordably high and people with pre-existing
     conditions would be denied coverage altogether; and

b.  If you are lucky enough to keep your employer plan the
     federal government would tax you.

[Parenthetical note: That McCain responded so ineptly to all this helped Obama win the (election) battle, but caused so much over-confidence it may now cost him the (policy) war. Indeed, I think President Obama has been truly surprised by the strength of the arguments currently being made against his reform plan.]

Now comes the surprise from Capitol Hill: Forget everything we said during the election. We really didn’t mean it after all. In particular:

a.  Whereas the campaign mantra was universal coverage
     (“we’re the only developed country that doesn’t insure
     all its citizens”), that term is almost never heard any 
     more. The clear goal now is to nationalize the health care
(“we’re the only country in the world that doesn’t
     have a national system”).

b.  Far from being left alone if you like the plan you are in:

1.  You and your employer are going to be heavily taxed
     if your insurance doesn’t conform to the plan the
    federal government is designing.

2.  You, along with millions of other Americans, may lose
     the plan you like and be pushed into a health insurance
     exchange where the premiums are likely to be higher
     than what you now pay and health plans have
     perverse incentives to underprovide to the seriously

3.  Costs cannot be controlled unless we all get less —
     fewer tests, fewer exams, fewer services — with
     Barack Obama’s grandmother’s hip replacement being
     Exhibit A.

c.  Far from escaping the financial burden of reform, it now
    appears that everyone will be burdened — from the
    elderly to the casual consumers of soda pops.

So, should people be angry? I report. You decide.

Comments (16)

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  1. Ken says:

    Great song pairing!

  2. Larry says:

    I am quite surprised that the following argument has not surfaced.

    Today, you may not be pleased with the restrictions and the interference that you perceive that your health plan has in your relationship with you and your doctor. But, if you have an issue with the approval of a course of treatment by your health plan, you can take several different courses of action. You many appeal to your health plan, if denied often you can receive an independent review.

    If you are in an employer’s plan often they will intercede on your behalf to resolve your issue.

    If these fail you can utilize the Court system to rectify the system.

    Now if there is a public plan run by the government what will your recourse be if you do not agree with a treatment plan that the public plan denies?

  3. Ben Webb says:

    Any plan that does not include all Federal employees including the U.S. Representatives and U.S. Senators is not acceptable. We need to vote out all of the current congress and replace them with people that are in touch with the American people. Then we need to institute term limits, remove the lifetime pay and healthcare coverage for all of the U.S. congress.

  4. Devon Herrick says:

    Left-leaning policy wonks do not understand the nature of insurance. They view insurance as the only way to access medical care. Thus, policy wonks assume insurance is a captive market, at their disposal, to provide income transfers to sick people or poor people or just about any other group they hope to appeal to.

    Insurance, by its very nature, is asset protection for people with assets to protect. If the cost of insurance exceeds an individual’s expected costs by a large margin, they may decide go without coverage. If someone is not averse to risk, they may go without coverage. If it has repeatedly reinforced in someone’s mind that physician care is readily available, they may decide to go without coverage.

  5. Dan Koon says:

    Not to be a pessimist, but I firmly believe that Congress will pass something and call it National Health Care before the next elections. It will be suicide if they don’t. And after it has passed, it will never be repealed, just revised to grow as all “free” services from Washington.

    By the way, has anyone else noticed that HBO is showing the movie “Sicko” three to four time per week during prime time?

  6. kas says:

    I am APOPLECTIC at recent report out of White House that they plan to exercise nuclear option to push this bill through without support of conservative Dems and Repulicans. AND against the will of the people.
    If they want real war and revolution, they are about to embark upon it, because the people WILL NOT STAND for this. I feell like I am living in some Banana Republic. This is all way too much for me.

  7. P Jones says:

    Unfortunately I agree with Dan. The liberals in power will push a bill through. Their goal is to enlarge the government, not to appease their constituents. They have no fear of the people because they don’t believe they represent the people–they work for the special interests that provide the money for their re-elections, and they believe the people will forget all this by next year and be captivated by their slick new campaign messages. The liberals will have done what they set out to do–get a health care program that will open the door to an eventual program that is totally controlled by the government. We need to be looking ahead for the next big initiative–I would guess Immigration? How much damage can they do to the republic before next November–a lot!

  8. Eric Stilson says:

    After following much of the discussion regarding the healthcare debacle on all sides, one thing is clear;
    everyone has an opinion, a criticism, an objection,and a great deal of anxiety, but no one, not anyone,
    has a meaningful plan. Everyone expounds on what should be in the plan or what shouldn’t be in the plan, but no one integrates their ideas or criticism into an actionable PLAN. So in the interests of over simplfying, how about this. The federal government pools all the anticipated costs of creating, providing
    and servicing this untenable monster,and creates a national healthcare mega-fund (perhaps in concert with or underwritten in part by insurance companies) from which a DISCOUNTED health system is formulated and administered with minimal overhead, beaurocracy and cost. Since the goal here is primarily asset protection, it could leave the market free to competively operate normally.
    It would be a “discount” program and not a traditional
    “insurance” based program, but with the same asset protection goal. There is no need for “insurance” if everyone is included and everyone’s assets are protected proportionate to those assets. Much of the discounts would be voluntarily provided in a competitive “free” market healthcare environment by the providers themselves. The balance would come from the super-fund. It would work as follows: The chronically ill, who are a small part of the population, but the greatest consumers of healthcare resources would receive “discounts” on services proportionate to their income/net worth. I.e. high net worth 70% discount, medium net worth 80%, low net worth 90% and below poverty line 100% discount. That mitigates the tendency to over-provide or over-use critical services, because for most patients there would be some level of payment required. It also provides asset protection for all wealth levels proportionate to that wealth. For singular catastrophic protection the same rules would apply for that particular event. For the young and the healthy, they choose and use only what they need, which is minimal. No need to carry and pay for insurance programs designed to have them subsidize maternity, and other expenses unless they need them. However they would also receive medical discounts. Albeit not as aggressive as those provided for the chronically ill and the singular catastrophic events. I.e. typical services, care and preventative care at a 50% discount. This would typically cost healthy people less each year than the out-of-pocket cost of paying to meet the deductable for insurance they never use. Yet, with this discount plan, their assets are still protected, because the plan still provides catastrophic and chronic illness provisions should they need them.

    Again, this is an oversimplification probably full of
    holes. But if we never begin to move this discussion away from argument and forward to possible solutions… not much will change and we will end up with yet another government program, ill advised, poorly run and hugely wasteful. I’m a republican who voted for Obama, and I continue to think he is our best chance for innovation. He’s not there yet, but if we all start doing some of the heavy lifting with him instead of all the rancor, (construction rather than destructive thinking) perhaps there is still a chance that a meanful plan can still be forthcoming.

    Eric L. Stilson

  9. Scott Stevens says:


    My name is Scott Stevens and I am a staunch advocate for CDH and have helped thousands of businesses and individuals implement CDH strategies since my days working on the MSA pilot project in '96. I have enjoyed hearing your presentations at the CDHC conferences I've attended (and spoken at) in the past, and read your blog regularly. Recently, a large prospective government client of mine shared this attack on CDH…HSAs in particular, and was hoping you could provide an eloquent rebuttal? Perhaps you already have?

    Thanks so much.

  10. David C. Rose says:

    I realize the voucher plan has little chance. But if all it does is change the conversation, giving people something simple and concrete to respond with, it might avoid serious errors in reform.

  11. Lee Edwards says:


    You sum up in a few hundred words what all the others cannot because you are not looking at the problem through ideological glasses.

    Congratulations. Well-done.

    Keep it up.

    They are on the run.

  12. John Cole says:

    Hell, I can’t, for the life of me, figure out what value the insurance companies add at all. Seems like all they do is skim money off the top, add layers of paperwork, and then screw people when they get a serious illness. More than that, most of “health insurance” isn’t really insurance at all, except for a bit of catastrophic insurance which they try to avoid paying out. In fact, by implementing lifetime caps, the insurance companies have eliminated the need for re-insurance with an individual attachment point. The insured is now the re-insurer!

  13. Brian says:

    As a supporter of healthcare reform, I also hope that the democrats do not try to force the issue by using a nuclear option, (a play straight from conservatives BTW).

    What they should do is allow conservatives to continue to kill healthcare reform and hound that issue until 2016. Run on the very provable fact that conservatives have sided with buisness AGAINST the American public. As for special interests…… conservatives are going to be demanding a huge payout from insurance and insurance will pay them off. Insurance will then turn around and increase OUR premiums. The ones who are losing the money of “special interest” is the democratic party…. only conservatives will be reaping the blood money paid by insurance companies.

    So let conservatives kill reform YET AGAIN, and make sure that every voter knows that their family’s financial hardship and their health concerns are the direct results of conservatives in office who care more about bribes than they do about the American citizen.

  14. Joe S. says:

    Brian, do you not read newspapers. The insurance industry has been behind closed doors wth Obama and the Democrats for the past eight months designing a new health care system. The drug companies (attacked by Obama during the election) are now in bed with the president completely. Also, I think you will find that all these special interest groups gave more money to Obama and the Democrats than they gave to McCain and the Republicans.

  15. Brian says:


    I am well aware that insurance and pharma are in conference with the president. I also know that pharma has agreed to assist the elderly with their prescription costs. I also know that many pharma companies offer a “compassionate use” where medications are provided at little to no cost to the customer. I happen to know because I have to use trhose services. I also know that by using “compassionate use” there is ALWAYS a gap in medication. I have to wait until my prescription is done to get a refill. I cannot get that refill prior to the entire consumption of the prvious medication. When I get the script, I must mail that out to the company. That takes at least 3-4 days. Then it gets processed which takes usually 1-2 weeks, Then the medication is mailedto me which is yet another 3-4 days. So I effectivly have to go without life-savinbg medication for about a 3 week period. Now think if I was a diabetic and needed insulin. I wouldn’t have insulin for 3 weeks. for a person that requires daily insulin, (often multiple times a day), 3 weeks without IS life and death. Now the compassion of pharma and their desire to help is applaudable but NOT ENOUGH.
    Insurance companies are comingto the point where they are dropping the pre-existing condition clause. Great and about time they did that, but again the issue isn’t about getting “coverage” it is that coverage should be coverage and not just acceptance. I’m not saying that my pre-existing condition be covered, because as it is pointed out, that encourages abuse ofthe system. What should happen though is that medical needs (other than the pre-existing), be covered which they are not at present. Being HIV I might get a cold but left untreated, that cold can turn to pneumonia which leads to a week or more in the hospital which I have no ability to pay. You get that cost which could have been avoided by the insurance company treating the cold in the first place.

    As to who gets more bribe money, I am aware that both parties get bribe money, I also happen to believe in common sense. Insurance stands to lose its monopoly, it loses its ability to raise prices whenever they choose. They risk having a competitor come in and offer what they already offer butfor a lower price which threatens the bottom line. It makes common sense for insurance to back the opponents of reform, (in this case that means republicans). Insurance and pharma are making concessions in the hopes that if they show their willingness to “change” there will be a perception that there is no need for reform and the market will “fix” itself but above all they maintain their monopoly under their terms. All of that is great and applaudable but again NOT ENOUGH!
    If they had truly wanted to change their buisness practise they would have already. The fact is that using common sense and historical records, it becomes clear that they aren’t doing this out of the goodness of their hearts but because they MUST, (which is also the reason that republicans are even talking about reform now— because they MUST).

    Again the issue isn’t whether the government can do a better job, but that government cannot possibly do any worse. Insurance has been a large part of the problem of healthcare delivery and the spiking costs. MOST of what is paid as premiums to an insurance company are not used for medical services but are pocketed as profit. In fact 450% profits means that less than 1/4 of any given premium is actually used for medical coverage. Not because that is the neccessity but because some insurance guy wants to take a 6 month vacation to the Meditteranean.

    Everyone here can vilify me as much as they want to. Just because I use common sense instead of economic terms and all sorts of language that regular people do not understand, I am somehow less, that I don’tread papers, that I ignore (fill in the blank). What I see is yet again the desertion of REGULAR americans by our government. I see MILLIONS terrified until they are blinded to the realities of what being un-insured meands and how it affects life. If republicans can admitthat the cost of medical care affects the standard of living then why is it so hard for republicans/conservatives to understand that having NO insurance absolutly DESTROYS any standard of living? I got myself off of welfare and off of Social Security, (although my HIV certainly qualifies me for disability today), because I feel as if I am a productive and capable adult. I have responsibilities which I meet as best I can but I also know that there is NO WAY I will ever be financially secure, that I will never be counted as lower middle class, that as hard as I work, I will never have anything to show for it. Because of un-insurance I am incapable of owning a car, renting a descent house or apartment free from drug-infested and crime-infested areas. AND this is the system that you wish to continue so that more people can be forced into poverty.

    The system is responsible for the mess we are in now and I am supposed to trust that same system? Common sense will tell you that if you do the same things you get the same results. So trusting in the system, leaving reforms up to the system will get us exactly where we are now. The only difference being that the number of uninsured will be higher, medical care will be more expensive and less available. I don’t want, or think it fair, to pay 5 or 6 times for one single product. That is exactly what people are doing under insurance today.
    1) We pay our taxes which funds the majority of pharma R&D
    2) Pharma includes a surcharge in its pricing to cover the 100% cost of R&D, (when they didn’t pay 100% of the cost)-(in other words a fraudulent charge)
    3) We the consumer pay them again when we purchase the drug.

    Pharma gets paid by the taxpayer/consumer at least twice and pharma pays itself because they charge for costs that never occured in the first place.

  16. carol says:

    I am an independant. I definately think reform is needed. I cant stand that this has become a hate fest. Repubs and Dems should both be at the table of crafting a bill. They both agree on many issues, pass them! The total bill as it stands now is not what the people want. So why cant they start on another right now, no waiting. I dont think it should be this or nothing.
    I think that Brian has done well in presenting his needs. I agree that he should be covered! I think all people that need health care should be able to get it. Lets work toward that and stop the bickering. Start over on a new bill, we all want reform.