Reagan Was Right: Trust But Verify

We don't use many Reaganisms here at DWT but this famous little Russian proverb he used-- doveryai, no proveryai-- was meant to telegraph his deepest feelings about Soviet intentions on the international stage. I hope President Obama has the phrase in the back of his mind when dealing with the six major players from the medical-industrial complex who, perhaps like Greeks bearing gifts, may be ready for a compromise on health care, now that they see public sentiment has shifted away from allowing the public to be fleeced. In his column today Krugman claims their offer to stop cheating consumers, saving $2 trillion over the next decade, is "tremendously good news." But he urges caution as well.

Before we start celebrating, however, we have to ask the obvious question. Is this gift a Trojan horse? After all, several of the organizations that sent that letter have in the past been major villains when it comes to health care policy.

I’ve already mentioned AHIP. There’s also the Pharmaceutical Research and Manufacturers of America (PhRMA), the lobbying group that helped push through the Medicare Modernization Act of 2003-- a bill that both prevented Medicare from bargaining over drug prices and locked in huge overpayments to private insurers. Indeed, one of the new letter’s signatories is former Representative Billy Tauzin, who shepherded that bill through Congress then immediately left public office to become PhRMA’s lavishly paid president.

The point is that there’s every reason to be cynical about these players’ motives. Remember that what the rest of us call health care costs, they call income.

What’s presumably going on here is that key interest groups have realized that health care reform is going to happen no matter what they do, and that aligning themselves with the Party of No will just deny them a seat at the table. (Republicans, after all, still denounce research into which medical procedures are effective and which are not as a dastardly plot to deprive Americans of their freedom to choose.)

I would strongly urge the Obama administration to hang tough in the bargaining ahead. In particular, AHIP will surely try to use the good will created by its stance on cost control to kill an important part of health reform: giving Americans the choice of buying into a public insurance plan as an alternative to private insurers. The administration should not give in on this point.

You probably have noticed that Ken and I both think Krugman is one of the very sharpest knives in the drawer. Blaming the impasse soley on Republicans-- if that's what he means by "the Party of No"-- is dangerous. Fattened by bankster bribes, the Blue Dogs have vowed to water down any and all proposals for real health care reform. The second Ted Kennedy fell ill with a brain tumor, Max Baucus, a worse shill ($2,797,381 worth, not counting the Insurance Industry!) for the medical industrial complex than any Republican-- unless you still consider Specter one, as I do-- grabbed jurisdiction over the health care legislation. The $3,420,880,285 in lobbying since 1998 (second only to the banksters, who have also been ripping off the public at a phenomenally destructive rate with the connivance of Congress) and the $823,948,241 in direct contributions to federal candidates since 1990, explain a lot of "bipartisan" the reasons why the U.S. spends more on health care than any other country in the industrialized world and has one of the very worst health care delivery systems, leaving out countless millions of families entirely. And now they're volunteering to "do our part."

The groups aim to achieve the proposed savings by using new efficiencies to trim the rise in healthcare costs by 1.5 percent a year, the officials said. That would carry huge implications for the national economy and the federal budget, both of which are significantly affected by health-care expenses.

...Despite such heady predictions, many aspects of the plan remain unclear. The groups did not spell out yesterday how they plan to reach such a target, and in a letter to Obama they offer only a broad pledge, not an outright commitment.

In addition, White House officials said, there is no mechanism to ensure that the groups live up to their offer, only the implicit threat of public embarrassment. And it would be difficult to track whether they come up with the promised savings, other than the imprecise measure of comparing current projections of health-care cost increases with future actual costs.

There is no single factor that was more important to Obama's and the Democrats' victories last year than the belief voters had in real change in the health care system. I know Obama can't arrest the whole lot of them when they come callin', but he needs to remember that these people, and the avarice they represent, have done more damage to the American people than the Soviets ever did. It's important that Obama bring more of a balance back between what has been a runaway private sector and the public good. The announcement today, for example, that they'll be restoring pre-Bush aggressive enforcement of antitrust regulations is good news. It's a balance between protecting society and protecting corporate bottom lines-- and it is WAY out of whack.

The announcement is aimed at making sure that no court or party to a lawsuit can cite the Bush administration policy as the government’s official view in any pending cases. Ms. Varney [head of the Justice Department’s antitrust division] warned judges and litigants in antitrust lawsuits not involving the government to ignore the Bush administration’s policies, which were formally outlined in a report by the Justice Department last year.

The report applied legal standards that made it difficult to bring new cases involving monopoly and predatory practices.

As a result of the Bush administration’s interpretation of antitrust laws, the enforcement pipeline for major monopoly cases -- which can take years for prosecutors to develop-- is thin. During the Bush administration, the Justice Department did not file a single case against a dominant firm for violating the antimonopoly law.

Many smaller companies complaining of abusive practices by their larger rivals were so frustrated by the Bush administration’s antitrust policy that they went to the European Commission and to Asian authorities.