McClaughry: Shumlin’s peculiar collection of ‘facts’

Editor’s note: John McClaughry is vice president of the Ethan Allen Institute

On Sept. 5 Gov. Peter Shumlin gave a televised interview to Steve Pappas, editor of the Times Argus. The bulk of it dealt with the new health insurance exchange and its scheduled successor Green Mountain Care. As usual, the governor appeared articulate and well informed.

The problem is that the information Shumlin hands out often bears only a tenuous relationship to the truth.

Shumlin offered as an important reason for moving into single payer health care the inability of hospitals to share patient data and diagnostic results. A single payer system, he said, would solve this problem.

He cited a Fletcher Allen patient who subsequently went to Dartmouth-Hitchcock, which proposed to run the tests all over again because they (allegedly) couldn’t obtain the previous test results from Fletcher Allen.

But why do we need Green Mountain Care to solve this problem? In 2008, when Shumlin was Senate leader, the Legislature passed a law (Act 192) that authorized a Health Information Technology (HIT) plan to create “an integrated electronic health information infrastructure for the sharing of electronic health information among health care facilities, health care professionals, public and private payers, and patients.”

Shumlin again invoked his mantra of “health care is a right, not a privilege.” He may believe that health care ought to be a right, but it simply is not.

 

The Legislature also levied a new tax of .199 of one percent of health insurance claims to pay for implementing the plan. Three years into this program the HIT plan required even more money, so in 2011 the Legislature (many of whose members regularly intone that “health insurance is not affordable”) quadrupled the tax rate on claims, which Shumlin signed into law.

But now, five years into this program, the governor says we need a new multibillion dollar single payer plan to somehow make the providers share medical information that Vermonters have already spent millions of dollars in higher premiums to make possible.

Shumlin again invoked his mantra of “health care is a right, not a privilege.” He may believe that health care ought to be a right, but it simply is not. Even the Democratic Legislature that approved Shumlin’s landmark health care bill (Act 48 of 2011) stopped short of declaring health care to be a right, describing it only a “public good” (which it also is not).

Shumlin then stated that “Americans born today are projected to live less long than their parents.” Unless somebody is projecting an asteroid impact, this is obviously false. According to the World Bank, using U.S. government data, American children born today can expect to live 78.64 years. Their parents in 1990 could expect 75.22 years; every cohort before that expected even fewer years of life.

Shumlin let loose this whopper: “American health care costs are three to four hundred times the spending of other developed countries.” Let’s assume Shumlin was referring to per person spending. According to the OECD, Americans (public and private) in 2009 spent $7,960 per person, which is two and half times the OECD average of $3,283 per person.

To get a fantastic multiplier like “three or four hundred,” one would have to match America’s total health care spending with that of with some very small developed country – say Estonia, with a population four-tenths of a percent of ours.
In the same interview, on another topic, Shumlin averred that Vermont Yankee would require 300 employees for five or six years after shutting down in October 2014; thus there would be no catastrophic “jobs cliff” in the local economy.

According to experts in nuclear plant decommissioning, the real employment number will be around 300 during the first year after Vermont Yankee’s shutdown, and less than 100 after two years. These will mostly be guards and plumbers, not high-income executives and engineers.

It’s not uncommon for politicians to play fast and loose with facts. But few play so fast and loose, with such seeming sincerity, as Peter Shumlin. This could lead to a credibility problem.

Comments

  1. Keith Stern :

    IT COULD LEAD TO A CREDIBILITY PROBLEM? Anyone who believes that the governor has any credibility at all is most definitely a lot cause and will continue to vote for any chance to have Vermont a place to live let alone raise children.

  2. Stewart Clark :

    Health care is a human right. Please consider this concept as part of a Venn diagram. It lies within a large circle defined by: ‘What does it mean to be human?’ Where does the circle of political perspectives exist? Which circle do you choose to stand in?

  3. Tom Haviland :

    This is a very lame attempt to spin mountains out of molehills. Just for one example, I suspect Shumlin meant to say three or four hundred *percent*, not times.

    As for life expectancy, McClaughry conspicuously fails to compare our life expectancy to that in those awful countries with single payer health care. For example Canada’s almost 81 year life expectancy and Japan’s 82 and half year one.

    As for what he does say, he leaves out the disgraceful fact that life expectancy is falling in the US for the poorest americans. Maybe expanded health care could help with that?

    Or maybe McClaughry doesn’t think it’s a problem.

    • Tom,

      The US has about 100 million people who mostly came from nations with short life expectancies during the past 30-40 years.

      You expect them all of a sudden to live much longer, so the US life expectancy would also be about 80 years?

      It has nothing to do with single-payer.

      • Jeremy Hansen :

        I don’t have a comment on the original article. I do have a comment about life expectancies and the numbers being tossed around.

        According to the US Census Bureau, 38 million of the total 301.6 million citizens of the US were foreign-born in 2007. That’s 12.5%.

        53% of those are from Latin America, 27% from Asia, and 13% from Europe.

        Of the countries that most would consider to be “short” life expectancies (let’s arbitrarily say 10 years less than the US’s 79, so 69), most are in Africa. With the exception of two small Latin American countries, the rest are in Asia.

        About [12.5% * 27% =] 3.375% of the population could be coming from countries with a “short” life expectancy (let’s say 69 years). If the remaining 96.625% have an average life expectancy of 79 years, and then we add in the remaining 3.375%, it would only reduce the average by about 4 months. (If all 3.375% came from Sierra Leone with a life expectancy of 47, that would only reduce the average by about 13 months.)

        From this back-of-the-napkin look, it’s pretty clear that immigration would have a fairly small negative effect on the average US life expectancy, even when using inflated numbers. In fact, some research in 2004 in the Canadian Journal of Public Health found:

        “Male and female immigrants had, respectively, 3.4 and 2.5 years longer life expectancy than the US-born.”

        https://www.ncbi.nlm.nih.gov/pubmed/15191127

        So, yes, we should expect them to live longer, on average.

        The life expectancies that are going down in the US are those of white men and women without high school diplomas:

        http://www.nytimes.com/interactive/2012/09/21/health/a-troubling-trend-in-life-expectancy.html

        • Jeremy,

          Thank you for the clarification.

          The NYT article shows the about 20 million black men had a life expectancy of 70 years, and the about 20 million black women 77 years in 2008. A 40 million group that significantly lowers the US average life expectancy.

          About 20 million hispanic women 83 years, about 20 million hispanic men 78 years. A 40 million group that slightly raises the US average life expectancy.

          About 115 million white women 81 years, and about 115 white men 76 years. A 230 million group that largely determines the US average life expectancy of about 79 years.

          Least educated people, mostly poorer, with more adverse life styles and less access to healthcare, have shortest life expectancies; men’s expectancies are more affected than of women.

          It appears single payer has little to do with life expectancy.

          Raising the minimum wage to about $15/hr would enable poorer folks to access healthcare more often.

  4. John McClaughry :

    Mr. Haviland’s suspicions notwithstanding, Shumlin said “three or four hundred TIMES” twice in his statement.
    Shumlin did not compare US life expectancy with that of other countries, so I didn’t have an occasion to address that. He said today’s newborns have a lower life expectancy than their parents, which simply isn’t true, no matter when their parents (or grandparents) were born.
    Mr. Clark may believe we all have a “human right” to have the government force medical providers to do things for us at somebody else’s expense, but nowhere in any of our rights can such a proposition be found.

    • Keith Stern :

      Once again the government could make healthcare affordable for all Americans simply by offering catastrophic coverage instead of first dollar coverage for low income people. Insurance companies would then offer plans up to the amount the government would cover very inexpensively.
      Auto insurance is a perfect example. The insurance companies have cheaper rates for a higher deductible. Why? Because they don’t pay out up to that amount which saves them money. The same thing would happen with the savings for the government. Lower costs= less revenue needed= less taxes.

      • Peter Liston :

        So then poor people will continue to forgo low cost preventative healthcare measures (like mammograms and prostate exams) choosing instead to pay for food and housing.

        And illnesses which are easily (and inexpensively) treated in the early stages won’t be treated until they get to critical, life threatening (and very expensive) stages.

        Your proposal is a prescription for higher costs and a sicker society.

        • Keith Stern :

          No it can be done as Obamacare is set up to pay for preventative tests. It can’t afford to pay for all the trips to emergency rooms and visits to the doctors for colds and other minor ailments.
          People can choose to buy very inexpensive healthcare insure or risk having to have to bear costs themselves.
          The major burden on people is catastrophic illness and it is a factor insurance companies have built in to the cost of insurance. Eliminate that for low income people and it reduces the cost of insurance greatly.

          • Peter Liston :

            We both share a goal of keeping people out of the ER. So that’s good.

            But — when you say that people can, “risk having to have to bear costs themselves” does that mean that the hospital should turn away a critically ill patient because they can’t pay? Let them die in the waiting room because they don’t have the cash?

          • Keith Stern :

            Again, catastrophic coverage provided by the government. The lowest income earners may be provided that at a very low amount, maybe $500-$1000. A policy that only has exposure to that would be a very low cost policy. Then there could be other factors that they are starting to use such as refunds for not using the insurance and giving customers a percentage of any savings they can make by shopping for the best price on procedures.
            Both are having excellent results in keeping costs down.

      • Nick Wilson :

        Do you have any actual evidence to back up your claim. I mean, beyond the beliefs you like to pretend are facts?

        If you are referring to any country first world country outside the US, you are talking about more government regulations, programs and overall involvement.

        • Keith Stern :

          I use something called common sense. Perhaps you’ve heard of it? It isn’t rocket science. Providing catastrophic coverage if necessary versus first dollar coverage; which would save money? Buying insurance that includes catastrophic coverage versus insurance that has a much lower cap; which is cheaper?

          • Nick Wilson :

            So, in answer, you have no evidence that your wild guesses are correct.

            I wish I could say I was surprised.

        • Keith Stern :

          BTW, no idea what that 2nd paragraph means.

    • Tom Haviland :

      By that argument we don’t have a right to a public education either. I don’t buy it.

      • Peter Liston :

        I support single payer but I agree that health care is not a human right.

        But like public education, I support single payer because it’s more efficient than the alternatives, costs less and delivers better outcomes.

        • Keith Stern :

          Right as long as it is run by a private business that can do it much more efficiently than government can.

          • Peter Liston :

            Actually, Medicare is much more efficient than private health insurance plans.

            And countries that have government run single payer healthcare systems spend less $$ per person on healthcare and they have better outcomes. People are healthier and they live longer.

            The facts contradict so called ‘conservative’ talking points.

          • Keith Stern :

            There are many factors that go into the cost of healthcare besides single payer vs. our system such as lifestyle, eating habits, deinking habits, obesity, drug use, etc. so they all need to be factored in to get the true picture. Also the majority of the cost is the last few years of our lives. How does that compare between countries? Do other countries limit care to the elderly? Huge factor there.

    • Ken McPherson :

      First to Shumlin’s cost of healthcare claims. Shumlin almost certainly meant to say that our health care costs are three to four hundred percent higher than those in many developed countries (i.e., three to four times those costs)- not three to four hundred times higher. I don’t see how it advances our understanding of the massive medical problems that we all face by focusing on obvious – and painfully frequent – misstatements using percentages and ratios. But then maybe advances are not a shared objective.

      Second, on life expectancy. According to a story in the LA Times “Women in large swaths of the U.S. are dying younger than they were a generation ago, reversing nearly a century of progress in public health and underscoring the rising toll of smoking and record obesity.” Obviously we cannot use this data to specifically say that these women are dying earlier than the own mothers, but Shumlin’s statement seems reasonable for this particular group. Many demographers and medical researchers have generalized these findings in statements about the impact of the obesity epidemic.

      Mr. McClaughry’s comments about the impact of immigrants directly contradict findings of the National Academy of Sciences panel that commissioned the report. “Communities with large immigrant populations — Southern California, for example — fared considerably better than average despite relatively high poverty rates. The worst-performing counties were clustered primarily in Appalachia, the Deep South and the lower Midwest. In those places, women died as much as a year younger in 2007 than women did a decade earlier. Life expectancy for women slipped 2 1/2 years in Madison County, Miss., which recorded the biggest regression” The difference in life expectancy trends is, in fact, highly correlated with regional income disparities, according to the report.

      Overall, American life expectancy is higher than many developed countries, but our rate of progress is falling behind many countries with single payer systems.
      [http://articles.latimes.com/2011/jun/15/nation/la-na-womens-health-20110615]

      Mr. McClaughry also simply does not understand some of the problems in medical information interchange. For example, laboratory information systems vendors – the people who sell the computer systems that collect and report test results and other diagnostic lab results, long forbid any interchange of data between their systems and those from competing vendors. Lab managers found it both cheaper and safer to redo tests rather than manually copy results between systems or into a common medical information system. I haven’t tried to resolve this problem lately, so I’ll ‘fess up and admit that things might have changed. If so, it was a long hard fight.

      Finally, the continued debate about whether a right to basic medical care exists continues to confuse me. Aren’t we endowed with certain unalienable rights, including life, liberty, and the pursuit of happiness? Pick your study, 40,000 to 90,000 Americans lose their life each year because they cannot afford basic medical care.

  5. Here are some Shumlin numbers relating to health care and Vermont Yankee that are not molehills, but more like the Himalayas.

    From the Governor: His health care plan was to reduce consumer costs and save $500 million in the first year. To date the Governor has spent, not saved, about $500 million of hard earned tax payer dollars on health infrastructure with no decrease in costs to consumers. Look at the rates to be offered on the new health care exchange next month. See any savings?

    Meanwhile at Vermont Yankee we’ll see more that 600 jobs disappear while a green glowing ember will remain on the banks of the Connecticut River for the next 60 years.

  6. Peter Liston :

    “Look at the rates to be offered on the new health care exchange next month. See any savings?”

    No, I don’t see savings in the rate charts. But I do see that (for the first time in a long time) costs are not increasing. It’s getting better, not worse.

    • Keith Stern :

      Costs are not rising in large part because of the slow economy. There are some advantages to a stagnant economy I guess.

  7. Peter Liston, where do you see evidence that health care costs are not increasing?

    • Peter Liston :

      My evidence is that I can purchase health insurance for my employees through the exchange today at about the same rates that I paid last year for about the same amount of coverage.

      It’s been a long time since we’ve seen prices level from one year to the next.

  8. Lance Hagen :

    I posted this about a week ago, but it is worth repeating. Until we see a ‘plan’ from the Shumlin administration, everything said about a single payer healthcare system, both pro and con, is pure speculation.

    That being said, the report from UMass was not very comforting if one analyzes their numbers. It states that the yearly operations will require $1.6 billion. This figure also assumes the state can squeeze another $300 million from the feds. If not, the annual bill is $1.9 billion. It also assumes the healthcare service providers are willing to accept lower payment rates that are 5% above Medicare rates versus what is being claimed to cover the cost of such service, being 30% above Medicare rates.

    All this only results in a cost reduction in healthcare spending with single-payer versus present system, of 0.60% in the first year and 1.5% over 3 years. To achieve this they had to assume that administration costs could be reduced from 12% to 7% %, which is very unlikely if the state has to hire someone like BCBS to administer the plan.

    A study the numbers in the report from UMass (tables 7 and 8) shows if you evenly distribute the $1.6B to $1.9B over the number of people covered under GMC single-payer plan, for a family of 4, this amounts to a tax of $13,600 to $18,800 per year. Now, since ~30% of the Vermont population was previously uninsured or on Medicaid and is unlikely they can afford such a high tax. So assuming that these people will cover 10% of the yearly cost and the remaining 90% of cost is covered by the 70% of the remaining population, the amounts to an annual tax, for a family of 4, of $21,800 to $34,500.

    I just don’t find these figures very comforting. I am concerned that Vermont is not big enough or rich enough to operate a single payer by themselves.

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