Climate has received most of the attention. But the Senate bill brings big changes to health care, too.

 

The Capitol this weekend.Kenny Holston for The New York Times

The overlooked provisions

The climate provisions in the bill that the Senate passed this weekend are likely to be more consequential than anything else in the bill. They will lead to a sharp reduction in U.S. greenhouse gas emissions, experts say, and help address arguably the world’s most pressing crisis.

But the other main spending portion of the bill — dealing with health care — is significant in its own right, and it has received much less attention. (I virtually ignored the health provisions in a newsletter last week. And take a look, below, at yesterday’s print front page of The Times.)

Today, I want to walk through both the substance of the health care provisions and the politics of them. As my colleagues Sheryl Gay Stolberg and Rebecca Robbins have written, those provisions appear to be the most substantial changes to health policy since the passage of Obamacare in 2010.

They are all but certain to become law, too. In coming days, the House Democrats are expected to pass the same bill that the Senate did, and President Biden has made clear he will quickly sign it.

Against inequality

The bill sets out to reduce Americans’ medical costs in two main ways. First, it uses federal subsidies to reduce the cost of both health insurance and prescription drugs. Second, the bill gives Medicare officials the power to negotiate with pharmaceutical companies, which will likely reduce the price that the companies charge for those drugs.

For these reasons, the bill is effectively an effort to use the health care system to reduce economic inequality, much as Obamacare was. The bill’s benefits will flow overwhelmingly to poor, working-class and middle-class families. Its costs will be borne by increases in corporate taxes (which ultimately fall on shareholders, who skew wealthy) and reductions in the profits of pharmaceutical companies.

Some critics of the bill have argued that these profit reductions will lead pharmaceutical companies to spend less money developing future drugs and, in turn, to fewer promising treatments. And that’s a plausible concern. Economic incentives matter.

But most experts believe that the pharmaceutical industry will remain plenty profitable after the changes. The Congressional Budget Office — a nonpartisan body — estimates that the law will reduce the number of new drugs introduced over the next 30 years by about 1 percent. “It doesn’t seem that big a deal,” Juliette Cubanski of the Kaiser Family Foundation told me.

A breakdown

Here are the bill’s main provisions:

It allows Medicare officials to negotiate over drug costs, giving companies less freedom to set high prices. That measure will mostly reduce Medicare’s spending, rather than families’ out-of-pocket costs — and, by extension, will reduce the federal budget deficit. But there will probably be spillover into out-of-pocket costs, especially for people in Medicare.

The bill sets a $2,000 annual cap on the amount of money that any senior pays for drugs. After somebody hits that cap, a combination of the federal government, private insurers and drug companies will pay the remaining bills. Today, drugs for cancer, multiple sclerosis, rheumatoid arthritis and some other diseases can cost people much more than $2,000 a year. The new provision will take effect in 2025 and will save a small percentage of older Americans thousands of dollars a year.

The bill caps out-of-pocket insulin expenses at $35 a month for people in Medicare; many now pay more than $50 a month. The bill also makes adult vaccines free for both seniors and people in Medicaid, starting next year. The shingles vaccine, to take one example, now often costs more than $50.

For middle- and lower-income people who buy private health-insurance plans through the Obamacare exchanges, federal subsidies will increase for three years. This change will help about 13 million people. A typical person in this situation now pays about $80 a month in premiums, thanks to temporary funding from Biden’s Covid relief bill. The price was set nearly to double next year but now will remain roughly the same, according to Krutika Amin of Kaiser.

Will people notice?

The political effects of the bill seem less clear.

I’ve written before about the work of Suzanne Mettler, a political scientist who has pointed out that many forms of modern government remain “submerged”: Americans often do not realize when a federal policy is helping them, because the benefits come through tax credits or other shrouded forms. Modern government tends to be more technocratic and complex than, say, Social Security.

It’s easy to imagine how these health care provisions might fit the pattern. Some of the benefits will flow through private insurance plans that people may not associate with a government program, Cubanski notes. Other provisions won’t take effect for a few years. Still others will spare people from facing a large medical bill, but they may not be aware that they wouldn’t have faced such a bill if Congress had not passed a new law.

“These are meaningful changes,” Cubanski said, “but most people may not necessarily notice that things are changing for the better.”

All of which suggests that the law’s proponents will still have work to do after the House passes it and Biden signs it. “It’s always important for supporters of a policy to explain how it will benefit people,” said Sarah Lueck, a health care expert at the Center on Budget and Policy Priorities. “And that’s really hard work.”

VoxCare: The Netherlands has universal health insurance — and it's all private

VOX

Trump’s Biggest Vulnerability: Health Care

ATLANTIC

Sanders and Warren Battle Accusations of ‘Fairy Tale’ Promises 

NY TIMES

Democratic Debate Turns Ferocious Over Health Care

NY TIMES

I READ THE NEWS TODAY:SUPR CT LIMITS CONTRACEPTN COVERAGE & UNION RIGHTS; UKRAINE TRUCE OVER; MORE GM RECALLS;

Court Limits Contraception Coverage Rule

Read it at Associated Press

Hobby Lobby won its battle against contraception at the Supreme Court on Monday, marking the first time the country's highest court held that a for-profit company can hold religious views and have them protected under federal law. In a 5-4 decision, the court ruled that a small set of privately owned corporations are not required to provide contraception coverage for employees. Hobby Lobby sued the federal government, claiming the Affordable Care Act’s contraception mandate for employer-provided insurance violated its religious beliefs and First Amendment rights.

"It's the first time that our court has said that a closely held corporation has the rights of a person when it comes to religious freedom," Hillary Clinton said in response to the decision. "I find it deeply disturbing that we are going in that direction."

The court ruled that the Religious Freedom Restoration Act (RFRA) allows for family-owned and closely held for-profit companies to enjoy the same exemptions as nonprofits for contraception objectors. The five conservatives who sided with Hobby Lobby qualified their opinion, though, making clear that the decision only applies to the contraception mandate. Authoring the majority opinion, Justice Samuel Alito said “Our decision should not be understood to hold that an insurance-coverage mandate must necessarily fall if it conflicts with an employer’s religious beliefs.” Other insurance mandates, like blood transfusions or vaccinations, may still proceed. The court also stressed that the ruling does not protect employers from engaging in illegal discrimination under the pretense of religious faith.

Birth-control coverage is one of the preventative services mandated to be free to employees under Obamacare. To maintain this regulation, Alito said there were two options. One, the federal government could pay for contraceptive services directly. Or two, as is the case with nonprofit, religious-oriented groups, employers could notify the government of their objections and shift the burden of coverage to third-party administrators or insurers.

In her dissent, Justice Ruth Bader Ginsburg denounced the ruling, saying “it discounts the disadvantages religion-based opt-outs impose on others, in particular, employees who do not share their employer’s religious beliefs.”

 

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Ukrainian soldiers are detained June 28 by pro-Russia separatists after the separatists seized a national guard base in Donetsk during the unilateral cease-fire proclaimed by President Petro Poroshenko. (European Pressphoto Agency)

TRUCE EXPIRES

Ukraine Prez: We Will Attack Separatists

 
Read it at The Los Angeles Times

A 10-day ceasefire between Ukraine and pro-Russia separatists came and went on Monday, and the Ukrainian government pledged not to extend it, despite the wishes of European leaders.

"We will attack and free our country," President Petro Poroshenko posted on his website. In a phone call with French President Francois Hollande and German Chancellor Angela Merkel, Ukraine was urged to sign a genuine ceasefire and set up international monitors on the Russian-Ukrainian border.

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GM Breaks All-Time Record for Recalls

 

/Reuters  Read it at Detroit News

 

With 8.45 million more vehicles being called back by General Motors on Monday, the auto company has officially broken the all-time record for most vehicles recalled in a single year by a single automaker. GM's new round of recalls are related to "unintended ignition key rotation," the same problem that was linked to more than a dozen deaths and scores of accidents. So far this year, GM has recalled back 25 million vehicles in 54 campaigns. On the same day, GM announced victims' families could file for compensation of at least $1 million. The compensation fund is being administered by 9/11 paymaster Kenneth Feinberg.

One recall for unintended ignition key rotation covers 6.8 million vehicles in the United States including the 1997-2005 Chevrolet Malibu; 1998-2002 Oldsmobile Intrigue; 1999-2004 Oldsmobile Alero; 1999-2005 Pontiac Grand Am; 2000-05 Chevrolet Impala and Monte Carlo; and 2004-08 Pontiac Grand Prix.

The other covers about 620,000 2003-14 Cadillac CTS, 2004-06 Cadillac SRX cars.

 

Earlier this month, GM recalled about 4 million cars for ignition switch problems in two separate campaigns. GM linked its recall of 3.4 million Impalas and other cars to eight crashes and six injuries. GM also recalled more than 510,000 current-generation Chevrolet Camaros for ignition switch problems linked to three crashes in which air bags failed to deploy.

Unlike in the Cobalt recall, GM is not replacing the switches in any of these new recalls. It is adding new key inserts or using a new key ring to prevent the fob from getting jostled.

GM also announced four other smaller recalls Monday, with only one resulting in an injury.

■189,000 2005-2007 Buick Rainier, Chevrolet Trailblazer, GMC Envoy, Isuzu Ascender, Saab 9-7x, 2006 Chevrolet TrailBlazer EXT, GMC Envoy XL vehicles are being recalled for the second time because of an electrical short in the driver’s door that could disable the lock and window switches, and in rare cases overheat the door control module. In August 2012, GM had opted to offer special coverage rather than a recall; but after pressure from NHTSA, the automaker agreed to the recall last year to add a protective coating, inspect the module and replace if necessary.

After fires were been reported since the initial recall — including some with completed repairs — GM will now replace the door control module in all vehicles.

■20,000 models of the 2011-14 Chevrolet Cruze, 2012-14 Chevrolet Sonic and 2013-14 Chevrolet Trax, Buick Encore and Verano are being recalled because the heater power cord may become damaged during very cold conditions. One injury has been reported, GM said.

■About 100 2014 Chevrolet Camaro and Impala and Buick Regal cars are being recalled because they may not have had a joint fastener tightened to specification at the assembly plant.

■12,000 2007-2011 Chevrolet Silverado HD, GMC Sierra HD trucks with auxiliary batteries because an underhood part could melt because of an electrical overload.

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Ruling Against Union Fees Limits Damage to Labor

 

            

The Supreme Court dealt a limited blow to organized labor on Monday by ruling that some government employees did not have to pay any fees to the unions representing them. But the court declined to strike down a decades-old precedent that required many public sector workers to pay union fees. Writing for the 5-to-4 majority, Justice Samuel A. Alito Jr. concluded that there was a category of government employees — a partial public employee — who can opt out of joining a union and not be required to contribute union fees.

 

Justice Alito wrote that home-care aides who typically work for an ill or disabled person, with Medicaid paying their wages, should be classified as partial public employees and should not be treated the same way as public schoolteachers or police officers who work directly for the government.

The court’s decision, on behalf of the five most conservative justices, was a partial, but not total win, for labor’s critics. And while labor sustained a defeat in this ruling, it did not amount to a crippling loss that unions had feared. If the court had overturned the precedent requiring many government workers to pay union fees, it could have greatly reduced the membership and treasuries of public-employee unions. Several legal experts said Justice Alito evidently had tried unsuccessfully to obtain the needed votes for a broader decision to overturn that precedent. Justice Alito wrote that unions played such a limited role for “partial public employees” like home-care aides that these aides should not be required to pay union fees. Indeed, he wrote that such a requirement would violate their First Amendment rights. He noted that states often set wages for these workers and that unions often did not bargain for them.

 

THE HYPE BEHIND THE VETERANS HEALTH CARE SCANDAL

Charles Ommanney/Getty Images

PAUL KRUGMAN, N.Y. TIMES

You’ve surely heard about the scandal at the Department of Veterans Affairs. A number of veterans found themselves waiting a long time for care, some of them died before they were seen, and some of the agency’s employees falsified records to cover up the extent of the problem. It’s a real scandal; some heads have already rolled, but there’s surely more to clean up.

But the goings-on at Veterans Affairs shouldn’t cause us to lose sight of a much bigger scandal: the almost surreal inefficiency and injustice of the American health care system as a whole. And it’s important to understand that the Veterans Affairs scandal, while real, is being hyped out of proportion by people whose real goal is to block reform of the larger system.

The essential, undeniable fact about American health care is how incredibly expensive it is — twice as costly per capita as the French system, two-and-a-half times as expensive as the British system. You might expect all that money to buy results, but the United States actually ranks low on basic measures of performance; we have low life expectancy and high infant mortality, and despite all that spending many people can’t get health care when they need it. What’s more, Americans seem to realize that they’re getting a bad deal: Surveys show a much smaller percentage of the population satisfied with the health system in America than in other countries.

 

And, in America, medical costs often cause financial distress to an extent that doesn’t happen in any other advanced nation.

How and why does health care in the United States manage to perform so badly? There have been many studies of the issue, identifying factors that range from high administrative costs, to high drug prices, to excessive testing. The details are fairly complicated, but if you had to identify a common theme behind America’s poor performance, it would be that we suffer from an excess of money-driven medicine. Vast amounts of costly paperwork are generated by for-profit insurers always looking for ways to deny payment; high spending on procedures of dubious medical efficacy is driven by the efforts of for-profit hospitals and providers to generate more revenue; high drug costs are driven by pharmaceutical companies who spend more on advertising and marketing than they do on research.

Other advanced countries don’t suffer from comparable problems because private gain is less of an issue. Outside the U.S., the government generally provides health insurance directly, or ensures that it’s available from tightly regulated nonprofit insurers; often, many hospitals are publicly owned, and many doctors are public employees.

 

As you might guess, conservatives don’t like the observation that American health care performs worse than other countries’ systems because it relies too much on the private sector and the profit motive. So whenever someone points out the obvious, there is a chorus of denial, of attempts to claim that America does, too, offer better care. It turns out, however, that such claims invariably end up relying on zombie arguments — that is, arguments that have been proved wrong, should be dead, but keep shambling along because they serve a political purpose.

 

Which brings us to veterans’ care. The system run by the Department of Veterans Affairs is not like the rest of American health care. It is, if you like, an island of socialized medicine, a miniature version of Britain’s National Health Service, in a privatized sea. And until the scandal broke, all indications were that it worked very well, providing high-quality care at low cost.

 

No wonder, then, that right-wingers have seized on the scandal, viewing it as — to quote Dr. Ben Carson, a rising conservative star — “a gift from God.”

So here’s what you need to know: It’s still true that Veterans Affairs provides excellent care, at low cost. Those waiting lists arise partly because so many veterans want care, but Congress has provided neither clear guidelines on who is entitled to coverage, nor sufficient resources to cover all applicants. And, yes, some officials appear to have responded to incentives to reduce waiting times by falsifying data.

 

 

Yet, on average, veterans don’t appear to wait longer for care than other Americans. And does anyone doubt that many Americans have died while waiting for approval from private insurers?

A scandal is a scandal, and wrongdoing must be punished. But beware of people trying to use the veterans’ care scandal to derail health reform.

And here’s the thing: Health reform is working. Too many Americans still lack good insurance, and hence lack access to health care and protection from high medical costs — but not as many as last year, and next year should be better still. Health costs are still far too high, but their growth has slowed dramatically. We’re moving in the right direction, and we shouldn’t let the zombies get in our way.

DON'T FORGET OBAMA'S ACHIEVEMENTS!

PAUL KRUGMAN, N.Y. TIMES

Several times in recent weeks I’ve found myself in conversations with liberals who shake their heads sadly and express their disappointment with President Obama. Why? I suspect that they’re being influenced, often without realizing it, by the prevailing media narrative.

 

The truth is that these days much of the commentary you see on the Obama administration — and a lot of the reporting too — emphasizes the negative: the contrast between the extravagant hopes of 2008 and the prosaic realities of political trench warfare, the troubles at the Department of Veterans Affairs, the mess in Iraq, and so on. The accepted thing, it seems, is to portray Mr. Obama as floundering, his presidency as troubled if not failed.

But this is all wrong. You should judge leaders by their achievements, not their press, and in terms of policy substance Mr. Obama is having a seriously good year. In fact, there’s a very good chance that 2014 will go down in the record books as one of those years when America took a major turn in the right direction.

 

First, health reform is now a reality — and despite a shambolic start, it’s looking like a big success story. Remember how nobody was going to sign up? First-year enrollments came in above projections. Remember how people who signed up weren’t actually going to pay their premiums? The vast majority have.

 

We don’t yet have a full picture of the impact of reform on the previously uninsured, but all the information we do have indicates major progress. Surveys, like the monthly survey by Gallup, show a sharp drop in the percentage of Americans reporting themselves as uninsured. States that expanded Medicaid and actively promoted the new exchanges have done especially well — for example, a new survey of Minnesota shows a 40 percent drop in the number of uninsured residents.

 

And there’s every reason to expect a lot of additional progress next year. Notably, additional insurance companies are entering the exchanges, which is both an indication that insurers believe things are going well and a reason to expect more competition and outreach next year.

 

Then there’s climate policy. The Obama administration’s new rules on power plants won’t be enough in themselves to save the planet, but they’re a real start — and are by far the most important environmental initiative since the Clean Air Act. I’d add that this is an issue on which Mr. Obama is showing some real passion.

 

Oh, and financial reform, although it’s much weaker than it should have been, is real — just ask all those Wall Street types who, enraged by the new limits on their wheeling and dealing, have turned their backs on the Democrats.

 

Put it all together, and Mr. Obama is looking like a very consequential president indeed. There were huge missed opportunities early in his administration — inadequate stimulus, the failure to offer significant relief to distressed homeowners. Also, he wasted years in pursuit of a Grand Bargain on the budget that, aside from turning out to be impossible, would have moved America in the wrong direction. But in his second term he is making good on the promise of real change for the better. So why all the bad press?

 

Part of the answer may be Mr. Obama’s relatively low approval rating. But this mainly reflects political polarization — strong approval from Democrats but universal opposition from Republicans — which is more a sign of the times than a problem with the president. Anyway, you’re supposed to judge presidents by what they do, not by fickle public opinion.

 

A larger answer, I’d guess, is Simpson-Bowles syndrome — the belief that good things must come in bipartisan packages, and that fiscal probity is the overriding issue of our times. This syndrome persists among many self-proclaimed centrists even though it’s overwhelmingly clear to anyone who has been paying attention that (a) today’s Republicans simply will not compromise with a Democratic president, and (b) the alleged fiscal crisis was vastly overblown.

The result of the syndrome’s continuing grip is that Mr. Obama’s big achievements don’t register with much of the Washington establishment: he was supposed to save the budget, not the planet, and somehow he was supposed to bring Republicans along.

 

But who cares what centrists think? Health reform is a very big deal; if you care about the future, action on climate is a lot more important than raising the retirement age. And if these achievements were made without Republican support, so what?

 

There are, I suppose, some people who are disappointed that Mr. Obama didn’t manage to make our politics less bitter and polarized. But that was never likely. The real question was whether he (with help from Nancy Pelosi and others) could make real progress on important issues. And the answer, I’m happy to say, is yes, he could.

In Need of a New Hip, but Priced Out of the U.S.

Michael Shopenn, who has an artificial hip, on Copper Mountain in Colorado



N.Y. TIMES Elizabeth Rosenthal

WARSAW, Ind. — Michael Shopenn’s artificial hip was made by a company based in this remote town, a global center of joint manufacturing. But he had to fly to Europe to have it installed.

Mr. Shopenn, 67, an architectural photographer and avid snowboarder, had been in such pain from arthritis that he could not stand long enough to make coffee, let alone work. He had health insurance, but it would not cover a joint replacement because his degenerative disease was related to an old sports injury, thus considered a pre-existing condition.

Desperate to find an affordable solution, he reached out to a sailing buddy with friends at a medical device manufacturer, which arranged to provide his local hospital with an implant at what was described as the “list price” of $13,000, with no markup. But when the hospital’s finance office estimated that the hospital charges would run another $65,000, not including the surgeon’s fee, he knew he had to think outside the box, and outside the country.

“That was a third of my savings at the time,” Mr. Shopenn said recently from the living room of his condo in Boulder, Colo. “It wasn’t happening.”

“Very leery” of going to a developing country like India or Thailand, which both draw so-called medical tourists, he ultimately chose to have his hip replaced in 2007 at a private hospital outside Brussels for $13,660. That price included not only a hip joint, made by Warsaw-based Zimmer Holdings, but also all doctors’ fees, operating room charges, crutches, medicine, a hospital room for five days, a week in rehab and a round-trip ticket from America.

“We have the most expensive health care in the world, but it doesn’t necessarily mean it’s the best,” Mr. Shopenn said. “I’m kind of the poster child for that.”

 

St. Rembert's, the private hospital in Belgium where Mr. Shopenn had his hip replaced for $13,660. Thomas Vanden Driessche for The New York Times



As the United States struggles to rein in its growing $2.7 trillion health care bill, the cost of medical devices like joint implants, pacemakers and artificial urinary valves offers a cautionary tale. Like many medical products or procedures, they cost far more in the United States than in many other developed countries.

Makers of artificial implants — the biggest single cost of most joint replacement surgeries — have proved particularly adept at commanding inflated prices, according to health economists. Multiple intermediaries then mark up the charges. While Mr. Shopenn was offered an implant in the United States for $13,000, many privately insured patients are billed two to nearly three times that amount.

An artificial hip, however, costs only about $350 to manufacture in the United States, according to Dr. Blair Rhode, an orthopedist and entrepreneur whose company is developing generic implants. In Asia, it costs about $150, though some quality control issues could arise there, he said.

 

So why are implant list prices so high, and rising by more than 5 percent a year? In the United States, nearly all hip and knee implants — sterilized pieces of tooled metal, plastic or ceramics — are made by five companies, which some economists describe as a cartel. Manufacturers tweak old models and patent the changes as new products, with ever-bigger price tags.

Generic or foreign-made joint implants have been kept out of the United States by trade policy, patents and an expensive Food and Drug Administration approval process that deters start-ups from entering the market. The “companies defend this turf ferociously,” said Dr. Peter M. Cram, a physician at the University of Iowa medical school who studies the costs of health care.

Though the five companies make similar models, each cultivates intense brand loyalty through financial ties to surgeons and the use of a different tool kit and operating system for the installation of its products; orthopedists typically stay with the system they learned on. The thousands of hospitals and clinics that purchase implants try to bargain for deep discounts from manufacturers, but they have limited leverage since each buys a relatively small quantity from any one company.

In addition, device makers typically require doctors’ groups and hospitals to sign nondisclosure agreements about prices, which means institutions do not know what their competitors are paying. This secrecy erodes bargaining power and has allowed a small industry of profit-taking middlemen to flourish: joint implant purchasing consultants, implant billing companies, joint brokers. There are as many as 13 layers of vendors between the physician and the patient for a hip replacement, according to Kate Willhite, a former executive director of the Manitowoc Surgery Center in Wisconsin.


Dr. Rory Wright at the Orthopedic Hospital of Wisconsin with two modern hip joint options.

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“Manufacturers will tell you it’s R&D and liability that makes implants so expensive and that they have the only one like it,” said Dr. Rory Wright, an orthopedist at the Orthopedic Hospital of Wisconsin, a top specialty clinic. “They price this way because they can.”
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Americans pay, on average, about four times as much for a hip replacement as patients in Switzerland or France and more than three times as much for a Caesarean section as those in New Zealand or Britain. The average price for Nasonex, a common nasal spray for allergies, is $108 in the United States compared with $21 in Spain. The costs of hospital stays here are about triple those in other developed countries, even though they last no longer, according to a recent report by the Commonwealth Fund, a foundation that studies health policy. ----

 [ Mr. Shopenn's ] joint implant and surgery in Belgium were priced according to a different logic. Like many other countries, Belgium oversees major medical purchases, approving dozens of different types of implants from a selection of manufacturers, and determining the allowed wholesale price for each of them, for example. That price, which is published, currently averages about $3,000, depending on the model, and can be marked up by about $180 per implant. (The Belgian hospital paid about $4,000 for Mr. Shopenn’s high-end Zimmer implant at a time when American hospitals were paying an average of over $8,000 for the same model.)

“The manufacturers do not have the right to sell an implant at a higher rate,” said Philip Boussauw, director of human resources and administration at St. Rembert’s, the hospital where Mr. Shopenn had his surgery. Nonetheless, he said, there was “a lot of competition” among American joint manufacturers to work with Belgian hospitals. “I’m sure they are making money,” he added.

Dr. Cram, the Iowa health cost expert, points out that joint manufacturers are businesses, operating within the constraints of varying laws and markets.

“Imagine you’re the C.E.O. of Zimmer,” he said. “Why charge $1,000 for the implant in the U.S. when you can charge $14,000? How would you answer to your shareholders?” Expecting device makers “to do otherwise is like asking, ‘Couldn’t Apple just charge $50 for an iPhone?’ because that’s what it costs to make them.”

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When joint replacement surgery first became widely used in the 1970s, it was reserved for older patients with crippling pain from arthritis, to offer relief and restore some mobility. But as technology and techniques improved, its use broadened to include younger, less debilitated patients who wanted to maintain an active lifestyle, including vigorous sports or exercise.

 

In the first few decades, implants were typically cemented into place. But since the 1980s, many surgeons have used implants made of more sophisticated materials that allow the patient’s own bone to grow in to hold the device in place. For most patients, implants have proved miraculous in improving quality of life, which is why socialized medical systems tend to cover them. Per capita, more hip replacements are done in Britain, Sweden and the Netherlands, for example, than in the United States.

 

Motivated in part by science and in part by the need to create new markets, joint makers churn out new designs that are patented, priced higher and introduced with free training courses for surgeons. Some use more durable materials so that a patient requiring a hip implant at age 40 or 50 might rely on it longer than the standard 20 years, while other models are streamlined and require smaller incisions.

Many doctors say that for most patients, older, standard implants with a successful track record are appropriate. Expensive modifications make no difference for the typical patient, but they drive up prices for all models and have sometimes proved to be deeply flawed, they say.

In the last few years, joint manufacturers have faced lawsuits and have settled claims with patients after new, all-metal implants, which were meant to be more durable than the standard version, had unusually high failure rates.

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Device makers have used some of their profits to lobby Congress and to buy brand loyalty. In 2007, joint makers paid $311 million to settle Justice Department accusations that they were paying kickbacks to surgeons who used their devices; Zimmer paid the biggest fine, $169.5 million. That year, nearly 1,000 orthopedists in the United States received a total of about $200 million in payments from joint manufacturers for consulting, royalties and other activities, according to data released as part of the settlement.

Despite that penalty, payments continued, according to a paper published in The Archives of Internal Medicine in 2011. ....      

Although only a tiny percentage of orthopedists receive payments directly from manufacturers, the web of connections is nonetheless tangled.

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There are, of course, a number of factors that explain why Mr. Shopenn’s surgery in Belgium would cost many times more in the United States. In America, fees for hospitals, scans, physical therapy and surgeons are generally far higher. And in Belgium, even private hospitals are more spartan.

When Mr. Shopenn arrived at the hospital, he was taken aback by the contrast with NewYork-Presbyterian Hospital, where his father had been a patient a year before. The New York facility had “comfortable waiting rooms, an elegant lobby and newsstands,” Mr. Shopenn remembered.

But in Belgium, he said, “I was immediately scared because at first I thought, this is really old. The chairs in the waiting rooms were metal, the walls were painted a pale green, there was no gift shop. But then I realized everything was new. It was just functional. There wasn’t much of a nod to comfort because they were there to provide health care.”

 

The pricing system in Belgium does not encourage amenities, though the country has among the lowest surgical infection rates in the world — lower than in the United States — and is known for good doctors. While most Belgian physicians and hospitals are in business for themselves, the government sets pricing and limits profits. Hospitals get a fixed daily rate and surgeons receive a fee for each surgery, which are negotiated each year between national medical groups and the state.

 

....European orthopedists tend to make about half the income of their American counterparts, whose annual income averaged $442,450 in 2011, according to a survey by the Commonwealth Fund, a foundation that studies health policy.

Belgium pays for health care through a mandatory national insurance plan, which requires contributions from employers and workers and pays for 80 percent of each treatment. Except for the poor, patients are generally responsible for the remaining 20 percent of charges, and many get private insurance to cover that portion.

Mr. Shopenn’s surgery, which was uneventful, took place on a Tuesday. On Friday he was transferred for a week to the hospital’s rehabilitation unit, where he was taught exercises to perform once he got home.

 

Twelve days after his arrival, he paid the hospital’s standard price for hip replacements for foreign patients. Six weeks later he saw an orthopedist in Seattle, where he was living at the time, to remove stitches and take a postoperative X-ray. “He said there was no need for further visits, that the hip looked great, to go out and enjoy myself,” Mr. Shopenn said.

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Mr. Shopenn’s new hip worked so well that a few months after returning from Belgium he needed a hernia operation — a result of too much working out at the gym. He was home by 4 p.m. the day of the outpatient surgery, but the bill came to $16,500. Though his insurance company covered the procedure, he called the hospital’s finance department for an explanation.

He remembers in particular a “surreal” discussion with a “very nice” administrator about a $750 bill for a surgical drain, which he called “a piece of plastic in a sealed bag.”

“It was mind-boggling to me that the surgery could possibly cost this much,” he said, “after what I’d just done in Belgium.”

LEECHING MEDICAID

NY TIMES

The White House is encouraging skeptical state officials to expand Medicaid by subsidizing the purchase of private insurance for low-income people, even though that approach might be somewhat more expensive, federal and state officials say.

Ohio and Arkansas are negotiating with the Obama administration over plans to use federal Medicaid money to pay premiums for commercial insurance that will be sold to the public in regulated markets known as insurance exchanges.

Republicans in other states, including Florida, Louisiana, Pennsylvania and Texas, have expressed interest in the option since Gov. Mike Beebe of Arkansas, a Democrat, received a green light from Kathleen Sebelius, the federal secretary of health and human services.

Valerie Jarrett, a top White House aide, has been a catalyst in talks with Ohio and other states.

The idea of using “premium assistance” to buy private insurance for new Medicaid beneficiaries is a sharp departure from the 2010 health care law, in which Congress expanded Medicaid to cover the poorest Americans and assumed that people with higher incomes would obtain private coverage through the exchanges.

In many states, Republicans are trying to create a hybrid of the two alternatives, taking federal money for the expansion of Medicaid but using it to help people buy commercial insurance instead.

State Senator Jonathan Dismang, a Republican from central Arkansas, said the idea appealed to him because it would “use the markets to provide better health care and to increase competition in the health insurance industry,” which could drive down costs.

[ Esco: The above news report is in today's paper. This is a case tho, where to learn the truth, you do want yesterday's paper. Or, to be exact, the paper of March 3, 2013 (below):

KRUGMAN NY TIMES

Conservatives like to say that their position is all about economic freedom, and hence making government’s role in general, and government spending in particular, as small as possible. And no doubt there are individual conservatives who really have such idealistic motives.

When it comes to conservatives with actual power, however, there’s an alternative, more cynical view of their motivations — namely, that it’s all about comforting the comfortable and afflicting the afflicted, about giving more to those who already have a lot. And if you want a strong piece of evidence in favor of that cynical view, look at the current state of play over Medicaid.

Some background: Medicaid, which provides health insurance to lower-income Americans, is a highly successful program that’s about to get bigger, because an expansion of Medicaid is one key piece of the Affordable Care Act, a k a Obamacare.

 

There is, however, a catch. Last year’s Supreme Court decision upholding Obamacare also opened a loophole that lets states turn down the Medicaid expansion if they choose. And there has been a lot of tough talk from Republican governors about standing firm against the terrible, tyrannical notion of helping the uninsured.

Now, in the end most states will probably go along with the expansion because of the huge financial incentives: the federal government will pay the full cost of the expansion for the first three years, and the additional spending will benefit hospitals and doctors as well as patients. Still, some of the states grudgingly allowing the federal government to help their neediest citizens are placing a condition on this aid, insisting that it must be run through private insurance companies. And that tells you a lot about what conservative politicians really want.

Consider the case of Florida, whose governor, Rick Scott, made his personal fortune in the health industry. At one point, by the way, the company he built pleaded guilty to criminal charges, and paid $1.7 billion in fines related to Medicare fraud. Anyway, Mr. Scott got elected as a fierce opponent of Obamacare, and Florida participated in the suit asking the Supreme Court to declare the whole plan unconstitutional. Nonetheless, Mr. Scott recently shocked Tea Party activists by announcing his support for the Medicaid expansion.

But his support came with a condition: he was willing to cover more of the uninsured only after receiving a waiver that would let him run Medicaid through private insurance companies. Now, why would he want to do that?

Don’t tell me about free markets. This is all about spending taxpayer money, and the question is whether that money should be spent directly to help people or run through a set of private middlemen.

And despite some feeble claims to the contrary, privatizing Medicaid will end up requiring more, not less, government spending, because there’s overwhelming evidence that Medicaid is much cheaper than private insurance. Partly this reflects lower administrative costs, because Medicaid neither advertises nor spends money trying to avoid covering people. But a lot of it reflects the government’s bargaining power, its ability to prevent price gouging by hospitals, drug companies and other parts of the medical-industrial complex.

For there is a lot of price-gouging in health care — a fact long known to health care economists but documented especially graphically in a recent article in Time magazine. As Steven Brill, the article’s author, points out, individuals seeking health care can face incredible costs, and even large private insurance companies have limited ability to control profiteering by providers. Medicare does much better, and although Mr. Brill doesn’t point this out, Medicaid — which has greater ability to say no — seems to do better still.

You might ask why, in that case, much of Obamacare will run through private insurers. The answer is, raw political power. Letting the medical-industrial complex continue to get away with a lot of overcharging was, in effect, a price President Obama had to pay to get health reform passed. And since the reward was that tens of millions more Americans would gain insurance, it was a price worth paying.

 

But why would you insist on privatizing a health program that is already public, and that does a much better job than the private sector of controlling costs? The answer is pretty obvious: the flip side of higher taxpayer costs is higher medical-industry profits.

So ignore all the talk about too much government spending and too much aid to moochers who don’t deserve it. As long as the spending ends up lining the right pockets, and the undeserving beneficiaries of public largess are politically connected corporations, conservatives with actual power seem to like Big Government just fine.