Which of These Four News Reports Is False? Insights from the Wacky World of Health Care Reform

Baron Von Munchhausen

Despite host Peter Segal's occasionally highbrow insider cleverness, The Disease Management Care Blog remains a loyal fan of NPR's "Wait Wait... Don't Tell Me" radio show.  While the DMCB has its suspicions about the ratio of truly spontaneous wit to pre-planned ripostes, that won't stop it from turning to a part of the show called 'Bluff the Listener' for bloggy inspiration.

BtL has guests try to guess which of three funny stories is based on a real true news report. The DMCB thinks health care is so wacky that it'd be more challenging to guess which of the four stories below is false.

Unfortunately, if you win, getting the DMCB to put its voice on your home answering machine is unlikely to impress anyone. However, if you can pick out which story is a complete Munchhausenesque fabrication, you will deserve the respect of your friends and co-workers.

Ready to try to get some bragging rights?

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Even doltish man-trolls know better than to try to organize an all-male blogging conference. Unable to reach out to that demographic, HHS Secretary Kathleen Sebelius did what's best: appeared before the annual "BlogHer" Conference in an appeal to women bloggers to tout the benefits of Obamacare. Her outreach supplements plans to rely on celebrities to help with a nationwide drive to increase enrollment through the insurance exchanges. Next up will be effort to recruit motor scooter owners to sport pro-Obamacare ads on the back of their helmets.  Then it's on to asking members of the European Beret Society to host recruitment drives at their monthly chardonnay tastings.

Answer here.

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Al Lewis and Vik Khanna condemned the wellness industry in a Wall Street Journal editorial when they proclaimed that "workplace programs don't work." They went on to say that they are "ineffective at reducing costs, lack support in the medical literature, are unpopular enough to require incentives and are occasionally even harmful." Yet, the Khanna On Health Blog's “workplace wellness consulting” page suggests the authors’ unique consulting insights can help potential customers “do wellness right.” Did the DMCB mention that both individuals are lawyers?

Answer here.

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Writing in a separate issue of the Wall Street Journal, former Vermont Governor and Democratic National Committee Chair Howard Dean actually attacked Obamacare by criticizing its Independent Payment Advisory Board as a rate setting enterprise that is doomed to failure. Brazenly using Tea Party terms such as "bureaucrats" and "health rationing," Dr. Dean's liberal-progressive apostasy prompted ACA architect Peter Orszag to curiously opine in a separate article in Bloomberg that the argument favoring IPAB is that it will be a much better rate setting body than Congress. If this keeps up, even labor unions will start criticizing Obamacare.

Answer here.

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While partisan blood continues to spill over Obamacare in Washington DC, there is much good news outside the beltway.  It's been announced that the IRS will not only rely on self-reporting of income levels in setting premium subsidies. Even better, individuals who qualify for tax credits while buying their health insurance with the on-line exchanges will get a two-fer: 1) the option of applying the rebates to reduce their monthly premiums, and 2) confidence that there won't be any tax liability "claw backs" should their final income be higher than anticipated. Interest and penalties will be optional.

Answer here

The Behavioral Economics Behind the Individual Mandate

Thanks to analyses like these, the Disease Management Care Blog is coming down with a tiresome case of individual mandatosis complicated by penaltyalgia.

Former CBO Director Douglas Holtz-Eakin's American Action Forum just posted that erudite and well-referenced article. It contrasts the simple cost of a) paying for subsidized insurance with "silver "and "bronze" high out-of-pocket costs vs. b) foregoing insurance, paying the penalty and paying retail for health care.  News outlets are reporting that the average person with average utilization will come out ahead with option B.  By implication, therefore, the penalty attached to the individual mandate is too small to make a difference.

"That's not the point," says the conservative DMCB.

The mandate was originally developed as a smaller part in a grand national experiment in behavioral economics.   It was long since departed White House Advisor Peter Orszag who betted that Obamacare's new "social norm" would nudge citizens toward doing right by buying health insurance.  The mandate was never intended to tip the financial scales, but act as a gentle reminder that could symbolically promote greater civic duty like voting or using seat belts.

The fundamental problem with the mandate isn't that the penalty is too small to change buying behavior.  The problem is that this building block of health reform remains an experiment.  It will be years before we can assess Orszag's bet on the impact of these behavioral penalties attached to the mandate.

The DMCB also remains wary of "average" outcomes.  While a typical silver or bronze buyer would come out ahead by being wary of the famous nine words about government "help," there is a small segment of individuals who would be protected from bankruptcy.  The purpose of insurance is to monetize risk and transfer it. That's a real cost for everyone, except the unlucky few who need it.

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