Biased Media Coverage of Town Halls: Which Party Does It help?

In today's Washington Post, E.J. Dionne makes the case that "the electronic media went out of their way to cover the noise and ignored the calmer (and from television's point of view "boring") encounters between elected representatives and their constituents". His column, "The Real Town Hall Story", concludes that this is evidence the media are not liberal: "the only citizens who commanded widespread media coverage last month were the right-wingers. And I bet you thought the media were 'liberal.'"

Although I agree the coverage was not balanced, I think Dionne ignores several points, and that the unbalanced coverage could also be evidence to the contrary of Dionne's conclusion.

First, most of the media coverage I saw about the protesters marginalized them, calling them ingorant, extremists, or worse, and many of the TV talking heads expanded this to include anyone else who thought like the protesters, or even entire regions or political parties. CNN regularly had panel discussions among pundits about it. The panel was often the show's host, 2 or 3 people criticizing the protesters, and one person meekly defending them. On CNN, I often saw the host interrupt and/or rebut the defender, while letting the criticizer take their time and finish their point. Instead of what Dionne is concluding, it's just as easy to conclude that the excess coverage of the protesters was an attempt to color all dissent as idiotic, while the President and others are calm and above the fray.

Second, the media are entertainment. If they're boring, nobody will watch. Dionne should know this, since the newspaper industry he works for is suffering as a result. So, nobody should be surprised at the absence of coverage of boring meetings. But, what really surprised me was how little people were aware of all the hatred that went on during the Bush years. The ignorance about how tame the town hall protests were in comparison supports the story that the town hall protesters were extremists. By covering one party's extremists, while ignoring the others, do the media make the party they cover look better or worse than the one they ignore? This website has excellent coverage of how extreme Bush-hating became during his presidency, and how little of it was covered by the media. I also commented on the assymetric coverage of "crazies" here, in response to a Washington Post article claiming only the Republican party has crazies.

Third, Dionne continues the storyline that all dissent is extremist by ignoring all the more mainstream forms of protest against the current version of health care reform. If the media were trying to cover only "right-wingers" in order to stop health care reform, why would they spend so much time on the protesters that are easiest to dismiss, and not on everyone else?

Opposition is far more widespread than a few outspoken people at town hall meetings - if the media's agenda was what Dionne suggests, they would focus on opposition from more serious groups. The AARP is very hesitant to back reform (my note here), many medical associations are against it (my note on one group of anesthesiologists here), and many feel tort reform should an important part of the bill, but Obama has ruled it out (here, here).

At http://www.freeourhealthcarenow.com/, there is a petition with more than 1.2 million signatures against Obamacare. By the time the petition is finished, it may be the largest such petition ever. John Goodman, one of the petition's organizers, wrote an op-ed in the Wall Street Journal last week, and describes the signers:

These are a very diverse group of people. Some of them are part of a 40,000-person network of former Obama supporters who are experiencing buyer's remorse. Others are part of various disease networks, including patients concerned about the future of cancer care. There are networks of senior citizens worried about cuts in Medicare and the possible closing of their private Medicare insurance plans. There are Christian conservatives worried about taxpayer-funded abortions and subsidies for euthanasia. And there are an enormous number of people who are simply concerned about their health care.

While you might disagree with many of these reasons, the diversity of the opposition proves that dissent is not limited to a few, like-minded people.

I also think the media is de-emphasizing the fact that the Democrats could pass heath care reform without any support from Republicans, if they could just agree among themselves. They have the White House and both houses of Congress. An August 1 Washington Post article (my note on the article) about the legislative process behind HR 3200 said: "Democrats have large majorities in both chambers, but they have discovered the perils of being a party that yokes together Northern California liberals and Deep South good ol' boys." If the right-wing dissenters are not the deciding factor in the debate, why cover them far more than the fighting within the Democratic Party?

Finally, Dionne does everyone a disservice by encouraging political debate based on ad hominem arguments, where citizens judge the message based on the messenger, not on the content. The more time people spend trying to figure out who is biased and how, the less time they spend analysing the message and seeking out diverse opinions. Partisan or personal attacks make for better entertainment than coverage of a quiet town hall meeting, but they probably don't give voters the information they need to make wise decisions at the ballot box, which is the purpose of a free media. I prefer to assume everyone is biased (because everyone is), find someone with the opposite bias, and listen to both. Let everyone speak honestly and openly, so everyone can make an informed decision.

President Obama wanted more transparency in the health care debate, and promised to televise much of it to keep people informed and involved. He broke that promise, and you have to wonder if the current situation would be improved if he had kept it.

Most useless "news" story ever?

What would we do without CNN? The lead story on CNN.com right now is "Obama aims to reset health care debate, aides say". In the article, an unnamed White House official says Obama is "considering all of his options on how to advance the debate and get reform passed. This includes possibly laying out a more specific vision." The chief executive of our country is considering being specific? That would really be novel. Also, hasn't his line all along been that everything's on the table? How is this a change worth reporting?

The article says David Axelrod thinks: "Obama is contemplating giving a major speech detailing what he would like to see included in health care legislation." Contemplating yet another speech! Why didn't anyone think of that before? I guess the way to deal with "wavering support" is to finally tell people what you are asking them to support?

If you keep reading, trying to figure out what makes this fluff newsworthy, the article says "No decisions have been made yet". Whew - I thought I was missing something in all the earlier certainty!

Near the end of the article, it says "Obama has come under growing pressure from liberal activists and leading congressional Democrats to provide more specifics". Ok - now I see the news - the Democrats are upset that their leader isn't providing any leadership.

Why didn't CNN just say so?

Government Stimulates Itself

So this is what they mean by the stimulus "creating or saving jobs". The Nashua (NH) Telegraph reports this from Acting State Stimulus Office Director Orville "Bud'' Fitch:

The report also revealed that through the end of June that stimulus money created or saved 796 jobs, with 700 of those state workers who did not have to get laid off thanks to the federal grants, Fitch said.

If you work for a private firm, your company probably has laid people off, or will. But if you work for the government, they will take money from taxpayers and from the future earnings of those private firms, making it harder for them to keep their employees, so that you can keep your job.

Hat tip to Mark Steyn of the National Review (here), who commented:

The "stimulus" is great if you're thinking of a career in Stimulus Office Management, Stimulus Office Management Consulting, Stimulus Office Human Services, Stimulus Office Promotion, or perhaps becoming a professor in Stimulus Office Studies.

Clunker of a Program

The Cash for Clunkers program continues to be an administrative headache for dealers, according to a CNN article:

The National Automobile Dealers Association released a statement late Friday insisting problems with the government's computer application system could mean legitimate "clunker" deals can't be submitted on time.

Each application for reimbursement takes up to 7 hours, and involves scanning up to 20 documents, depending on the customer. Some dealers have not been able to access the government website during regular hours due to too much volume.

The hassles involved with processing claims have dealers wondering whether the program was worth it:

"We have definitely sold more cars than we would have," [Michelle Primm, managing partner at the Cascade Auto Group in Cuyahoga Falls, Ohio] told CNN, "but the administrative cost may have eaten up the additional profit."

I wonder if any of these dealers have ever processed Medicare claims?

Right-wing, wacko...Anesthesiologists?

Apparently the American Society of Anesthesiologists (ASA) is an "un-American" organization because they are encouraging their members to show up at town-hall meetings and protest, according to Nancy Pelosi and Steny Hoyer's NY Times editorial last Monday. A "Congressional Recess update and action alert" posted on the ASA website says "NOW IS NOT THE TIME FOR REST, BUT FOR ACTION" (caps are theirs).

What is the ASA's objection? They call it their "33 percent problem" - "GAO, the investigatory arm of Congress, has found that Medicare pays anesthesiologists 33 percent of what private insurers pay for anesthesia services." The public plan proposed in H.R. 3200 will continue to use this rate, which the ASA says doesn't even come close to covering their costs, which include very high malpractice premiums.

This "33 percent problem" prompted an editorial in today's WSJ by anesthesiologist Ronald Dworkin which points out:

Every medical student learns an old adage: You can skimp on some medicine, but you can't skimp on obstetrics or anesthesiology. An elderly surgeon explained it to me this way, "In surgery, people die in days and weeks—a doctor has time to fix a mistake. But in obstetrics and anesthesiology, they die in minutes and seconds."

Also:

In no medical specialty is the spread between the Medicare rates and private insurance rates greater. Progressives expect to pay anesthesiologists Medicare rates, which are 65% less than private insurance rates, without any change in the system. But there will be changes. Some anesthesiologists will leave the field. They are already faced with lawsuits at every turn.

There is already a shortage of anesthesiologists, and Dworkin gives his thoughts on the possible effects of losing more of them:

Quality of care will inevitably decline. That decline will come first in obstetrics. At the hospital where I work, two anesthesiologists work in obstetrics almost around the clock, so that a woman in labor need not wait more than five minutes for her epidural. Other hospitals are less fortunate, and have on staff at most one anesthesiologist in obstetrics. The economic crunch will eventually force these hospitals to cover obstetrics "when anesthesiology is available," meaning in between regular operating room cases.

During an obstetrical emergency, these short-staffed anesthesia departments will scramble to send someone to perform the C-section. Don't forget, a baby has only nine minutes of oxygen when the umbilical cord prolapses, so time is of the essence.

At the very least, pregnant women will be waiting a lot longer for epidurals.

After this, further shortages become a matter of life and death according to Dworkin:

More pain on the labor floor is only the beginning. If hospitals delay the administration of anesthesia because Congress skimped, needless deaths will certainly result.

On the other hand, this rules out the "death panels". There won't be enough anesthesiologists to perform the euthanasia.

Cash for Clunkers Shell Game

Since the government's delays in reimbursing dealers for cash for clunker deals has been causing dealers to drop out of the program, GM is offering to advance cash to the dealers in the meantime, according to this WSJ article.

Since GM is now owned by the government and the UAW, any money GM advances to the dealers is really the government's money. So - GM bleeds money because they can't profitably sell cars - then they declare bankruptcy and are bailed out by the government - then the government offers cash to people to buy more cars - then the government can't pay people fast enough - so, they offer to temporarily shift their money from GM.

Will GM have to create a separate group to handle these requests that does the same thing as the government group that processes reimbursements?

Your tax dollars at work (twice)!

"It's a Matter of Trust"

Daniel Henninger, on the opinion page of today's WSJ, explains the public's frustration with Obama on health care reform by quoting Billy Joel: "It's a matter of trust." The public just doesn't believe the government has any ability to cut cost, only to expand entitlements:

In his op-ed Sunday for the New York Times [Obama] said, "We'll cut hundreds of billions in waste and inefficiency in federal health programs like Medicare and Medicaid." Hundreds of billions? Just like that? This is nothing but an assertion by one man. It's close to Peter Pan telling the children that thinking lovely thoughts will make them fly.

When the AARP corrected the President's assertion that they had endorsed his plan, they said "AARP will not endorse a health care reform bill that would reduce Medicare benefits." They simply don't think this Congress and President are capable of reforming health care without killing it, and apparently a majority of Americans don't think so either.

Government You Can Believe In!

News from this week:

TARP
The Wall Street Journal reported that "A plan by Treasury Secretary Timothy Geithner to limit lobbyists' influence over the $700 billion bailout program has yet to get off the ground -- even as the program nears an end...Last January, Mr. Geithner promised to craft rules preventing external influence over bailout decisions. More than six months later -- and 100 days before the financial-industry bailout program is scheduled to stop taking applications for aid -- those rules have yet to be finalized."

This failure even got the attention of the Huffington Post (here).

Cash for Clunkers
The Associated Press reports that "Hundreds of auto dealers in the New York area have withdrawn from the government's Cash for Clunkers program, citing delays in getting reimbursed by the government." The program has only paid for about 2 percent of those dealers clunkers deals so far, according to this article. Other articles have pointed out that up to half of dealer applications for reimbursement from the program have been denied due to minor clerical errors.

Regarding the government program, a spokesman for the dealers said "it's in the hands of this enormous bureaucracy and regulatory agency...If they don't get out of their own way, this program is going to be a huge failure."

White House Spam Attack
After initially denying that hundreds or thousands of people had received unsolicited emails from the White House, they decided to blame "unnamed political groups" for the error. Seems a President with expertise in community organizing and grass-roots politics and his advisor, David Axelrod, who founded a media consulting firm, don't know how to keep a secure email list.

Yet Another Bad Post Office Analogy

Last night, Rep. Jesse Jackson, Jr. (D-Ill.) suggested on CNN (video here) that the Post Office keeps DHL, UPS and FedEx honest, and so a public health care option would keep insurers honest:

"Look at it this way: There's Federal Express, there's UPS, and there's DHL," Jackson told CNN host Larry King. "The public option is a stamp; it's email. And because of the email system, because of the post office, it keeps DHL from charging $100 for an overnight letter, or UPS from charging $100 for an overnight letter."

This is a flawed analogy on several points:

First, this "honesty" comes with a price, which he fails to acknowledge. The Post Office is projected to lose $7 billion dollars this year, in spite of raising the prices of stamps several times recently. Where is that $7 billion going to come from? It will be subsidized with tax dollars. Where do tax dollars come from? The profits of corporations and the wages of individuals.

However, it is a good analogy in the sense that Medicare is bleeding money, just like the Post Office. While many claim Medicare is "working" because it has (so far) been able to provide a reasonable level of care, the Trustees of the Medicare trust funds say Medicare payroll taxes would have to more than double ($3.88 more will be taken out of everyone's paycheck for each $100 earned), or services would have be immediately cut in half to cover Medicare's budget shortfall. Until either of these happen, the Medicare deficit is paid out of general funds, which is the money collected through income tax.

By suggesting that whenever a private business is making too much money, the solution is to create a massive, money-losing, taxpayer-funded competitor to keep everyone "honest", Jackson seems to think there is no limit to government revenue and what people are willing to pay for and tolerate. Should the Post Office, or a public health insurance option, exist merely as a mechanism for transferring money from successful businesses to failed ones, with the goal of keeping everyone "honest"? If we keep subsidizing money-losing government "businesses" for this purpose, we might end up running out of profitable businesses.

Second, the example shows a misunderstanding of microeconomics. Suppose UPS raised its rate to $100, far above current rates. They would lose all their business to others who charge less, assuming the service quality is similar. Therefore, UPS would have to reduce their rate to a level that allows them to provide the service without losing money.

So, the Post Office isn't keeping UPS from charging $100 - DHL, FedEx, and the Post Office together are competing. Also - $100 is just a ridiculous price for an overnight letter! If a business charges more than people are willing to pay for something, customers will keep you honest by finding another way, and with no government subsidy!

Third, Health care in America isn't expensive because everyone is charging consumers $100 for something that should cost $10. It's expensive because there has been an explosion in technological innovation that enables us to treat things that were recently untreatable. Waste, fraud, profits, and other factors have contributed, but according to the Congressional Budget Office, technological change accounts for 40 to 65% of the increase in health care costs from 1940 to 1990 based on their analysis of several studies (see table 2 on page 8, here).

On his blog "Happiness in this World", Dr. Alex Lickerman says:

Heart attacks used to be treated with aspirin and prayer. Now they’re treated with drugs to control shock, pulmonary edema, and arrhythmias as well as thrombolytic therapy, cardiac catheterization with angioplasty or stenting, and coronary artery bypass grafting. You don’t have to be an economist to figure out which scenario ends up being more expensive.

Will Reducing Health Care Profits "Bend the Curve"?

I keep seeing comments on how outrageous it is that health care companies make profits, and how those profits are adding so much to the cost of American's health care. President Obama has said a public option is needed to "keep the insurance companies honest". "Right now, at the time when everybody's getting hammered, they're making record profits," he said in his July 22nd prime-time press conference. Can the high cost of health care in the U.S. be attributed to the profits of the insurance companies?

Based on all the rhetoric about how horrible these profits are, one might think reducing these profits would have a big impact on the overall cost of health care. So, for the sake of argument, let's assume that a public option, or some other reform, is enacted and is so effective that it eliminates all the profits of publicly traded health insurance companies. What would the impact be?

I pulled the net income (aka profit) for the last 8 quarters of all publicly traded companies that are part of the Russell 3000 Index, which includes nearly all stocks. Insurance companies are part of the Health Care Providers & Services industry, according to S&P. Although not all companies in this industry are insurers, I include them all anyway, which makes a list of 95 companies, which includes Aetna, Wellpoint, Cigna, and many others.

To level out changes over time, I averaged the last 8 quarters, then multiplied this by 4 to get an estimate for a year. Then I added them all up.

By this method, I estimate that all publicly-traded health insurance companies made $18.8 billion in profit, on average, over the last two years.

Big number, right?

However, consider that total health care expenditures for 2008 are estimated to be $2.394 trillion. (See table 1, page 3, here)

Therefore, if all profits of the health insurance industry were somehow eliminated, the U.S. would save 0.8% of its total health care costs. Not what I would call "bending the curve."

What if we include all health care companies - biotech, pharma, medical device companies, etc?

This results in a list of the largest 404 health care companies, which, using the methods above, make an estimated $73.5 billion of profit. Removing this profit from the system would save us 3.1% of our total health care costs. Again, not a major impact. Instead of health care costing us 15.3% of GDP, it would cost 14.8%.

Although blaming our health care problems on the profits of companies might make some people feel better, even getting rid of them entirely will barely dent the cost problem, and would almost certainly result in other problems.

Note: This analysis was inspired by similar work in Alex Lickerman's "A Prescription for the Health Care Crisis" (here). I strongly recommend you read his thoughtful analysis of why our health care is so costly. (Hint: it's not because of profits.)