warren buffet

[Azazello1313]

http://www.npr.org/blogs/thetwo-way/2010/0..._care_bill.html

 

WARREN BUFFETT: We have a health system that, in terms of cost, is really out of control, and if you take this line and you project what has been happening into the future, we will get less and less competitive. So, we need something else. Unfortunately, we came up with a bill that really doesn't attack the cost situation that much and we have to have a fundamental change. We have to have something that will end the constant increase in medical cost as a percentage of GDP.

BECKY QUICK: Then, are you in favor of scrapping this and going back to start over?

BUFFETT: I would be -- if I were President Obama, I would just show this chart of what's been happening and say this is the tape worm that's eating at American competitiveness, and I would say that one way or another, we're going to attack cost, cost, cost, just like they talk about jobs, jobs, jobs in the economy. It's cost, cost, cost in this side. That's a tough job. We're spending maybe $2.3 trillion on health care in the United States, and every one of those dollars is going to somebody and they're going to yell if that dollar becomes 90 cents or 80 cents. So, it takes -- but I would try to get a unified effort saying this is a national emergency to do something about this. We need the Republicans, we need the Democrats. We're going to cut off all the kinds of things like the 800,000 special people in Florida or the Cornhusker Kickback, as they called it, or the Louisiana Purchase and we're going to get rid of the nonsense. We're just going to focus on cost and we're not going to dream up 2,000 pages of other things. And I would say as President, I'm going to come back to you with something that's going to do something about this, because we have to do it.

QUICK: Just focus on cost or focus on cost while insuring more people?

BUFFETT: Well, yeah --

QUICK: Is there two different problems?

BUFFETT: Universality -- yeah, I believe in insuring more people, but I don't believe in insuring more people until you attack the cost aspect of this.

[bpwallace49]

Great interview that strikes right at the heart of the whole debate. Cost containment . . . . which the biggest area that ISNT addressed in the bill . .

[untateve]

Great interview that strikes right at the heart of the whole debate. Cost containment . . . . which the biggest area that ISNT addressed in the bill . .

 

But I want to get re-elected. If I cut something, I won't get re-elected.

[westvirginia]

Great interview that strikes right at the heart of the whole debate. Cost containment . . . . which the biggest area that ISNT addressed in the bill . .

 

So you're willing to admit this, and still rail on "obstructionism"? Please elucidate? Why SHOULDN'T a bill be stopped if it doesn't do the MAIN thing which is being sold as the reason for the bill?

[Perchoutofwater]

Why SHOULDN'T a bill be stopped if it doesn't do the MAIN thing which is being sold as the reason for the bill?

 

We'll duh, the great Obamassiah wants it to pass, what other reason does there need to be? If you disagree you area racist or of questionable intelligence.

[Duchess Jack]

We'll duh, the great Obamassiah wants it to pass, what other reason does there need to be? If you disagree you area racist or of questionable intelligence.

quality

[Perchoutofwater]

quality

 

I give you quality:

 

The Case for High-Deductible Health Insurance

By Michael Tanner

 

If President Obama's health care summit showed anything it is that when it comes to controlling health care costs there is bipartisan agreement in favor of looking for the easy solution. Both sides dragged out the traditional villains, "fraud, waste, and abuse." There was the usual search for silver bullets. Republicans dwelled at length on medical malpractice Democrats talked about pooling and the advantages of comparative shopping through the exchanges. Everyone was in favor of preventive care.

 

But both sides seem curiously unwilling to address the most important participant in the health care equation - the consumer.

 

Democrats appear to see consumers only as a class needing protection. Their focus is almost exclusively on government action.

 

Republicans at least give lip service to a consumer-focused health care system, but seem reluctant to really endorse proposals that shift more risk and responsibility to those consumers.

 

Perhaps that is because in the long-run, the only way to spend less on health care is to consume less health care. Someone, sometime, has to say no. But the incentives under our current health care system perversely encourage everyone to say "yes."

 

Essentially, we all want to live forever. This makes health care a very desirable good. At the same time, the normal restraints imposed by price are frequently lacking. Today, of every dollar spent on health care in this country, just 13 cents is paid for by the person actually consuming the goods or services. Roughly half is paid for by government, and the remainder is covered by private insurance. And, as long as someone else is paying, consumers have every reason to consume as much health care as is available.

 

On the other, when consumers share in the cost of their health care purchasing decisions, they are more likely to make those decisions based on price and value. Take just one example. If everyone were to receive a CT brain scan every year as part of their annual physical, we would undoubtedly discover a small number of brain cancers much earlier than we otherwise would, perhaps early enough to save the patient's life.

 

But given the cost of such a scan, adding it to everyone's annual physical would quickly bankrupt the nation. But, if they are spending their own money, consumers will make their own rationing decisions based on price and value. That CT scan that looked so desirable when someone else was paying, may not be so desirable if you have to pay for it yourself. The consumer himself becomes the one who says no.

 

Think of it this way. If every time you went to the grocery store, someone else paid 87 percent of your bill, not only would you eat a lot more steak and a lot less hamburger - but so would your dog. And food costs would go up for everyone.

 

The RAND Health Insurance Experiment, the largest study ever done of consumer health purchasing behavior, provides ample evidence that consumers can make informed cost-value decisions about their health care. Under the experiment, insurance deductibles were varied from zero to $1,000. Those with no out-of-pocket costs consumed substantially more health care than those who had to share in the cost of care. Yet, with a few exceptions, the effect on outcomes was minimal.

And, in the real world, we have seen far smaller increases in the cost of those services, like Lasik eye surgery or dental care, that are not generally covered by insurance, than for those procedures that are insured.

 

In fact, a study by Amy Finklestein of MIT suggests that nearly half of the per capita increasing health care spending is due to increased health insurance coverage.

No one is suggesting that people shouldn't have insurance. But insurance is ultimately meant to spread the risk of catastrophic events, not to simply prepay your health care. Your homeowners insurance covers you if your house burns down. It doesn't pay to mow your lawn or paint the fence.

Unfortunately, rather than getting consumers more engaged in their health care decisions, Congress appears ready to move in the other direction.

 

The president actually denounced high-deductible insurance and greater consumer cost sharing as "not real insurance." Both the House and Senate versions of health reform reduce co-payments and all but eliminate policies with high-deductibles. No co-payments at all are allowed for a wide variety of broadly-defined "preventive" services. The consumer share of health spending will actually decline to just ten cents of every dollar by 2019.

 

This all but guarantees that health care costs and spending will continue their unsustainable path. And that is a path leading to more debt, higher taxes, fewer jobs and a reduced standard of living for all Americans.

 

Health care reform cannot just be about giving more stuff to more people. It should be about actually "reforming" the system. That means scrapping the current bills, and crafting the type of reform that makes consumers responsible for their health care decisions.

 

RealClearPolitics

Edited March 1, 2010 by Perchoutofwater

[CaP'N GRuNGe]

http://www.politico.com/news/stories/0310/33693.html

 

Warren Buffett would scrap health care bill

 

Billionaire investor Warren Buffett advised President Barack Obama on Monday to scrap the health care bill and start over.

 

In an interview with CNBC, Buffett said the current bill does not focus on controlling costs, which he sees as the central problem that must be addressed to reform the system. He added that while he does not like the Senate bill, he’d vote for it in preference to doing nothing.

 

“What we have now is untenable over time,” said Buffett, an early supporter of Obama’s candidacy. “That kind of a cost compared to the rest of the world is really like a tapeworm eating, you know, at our economic body.”

 

“We have a health system that, in terms of costs, is really out of control,” he added. “And if you take this line and you project what has been happening into the future, we will get less and less competitive. So we need something else.”

 

But while Buffett, the chairman and CEO of Berkshire Hathaway, applauded Obama for taking up the reform effort, he said that “unfortunately, we came up with a bill that really doesn't attack the cost situation that much.”

 

Asked if he would be in favor of scrapping the Senate health care bill, Buffett responded: “I would be.”

 

If the president were to start over, Buffett would advise him to “just show this chart of what's been happening and say this is the tapeworm that's eating at American competitiveness. And I would say that one way or another, we're going to attack costs, costs, costs, just like they talk about jobs, jobs, jobs.”

 

Buffett urged Obama to say that “we're going to cut off all the kinds of things like the 800,000 special people in Florida or the Cornhusker kickback, as they called it, or the Louisiana Purchase, and we're going to — we're going to get rid of the nonsense. We're just going to focus on costs and we're not going to dream up 2,000 pages of other things. And I would say, as president, `I'm going to come back to you with something that's going to do something about this, because we have to do it.’”

 

Like Democrats in Congress, Buffett would like to expand access to health insurance, but he said he does not “believe in insuring more people till you attack the cost aspect of this.”

 

“If it was a choice today between plan A, which is what we've got, or plan B, what is in front of — the Senate bill, I would vote for the Senate bill,” Buffett said. “But I would much rather see a plan C that really attacks costs. And I think that's what the American public wants to see. I mean, the American public is not behind this bill. And we need the American public behind the bill, because it's going to have to do some tough things.”

[Brentastic]

Speaking of Buffett - I just bought the book written by his mentor, Benjamin Graham. The book is titled - 'The Intelligent Investor'. Totally off topic, I know - but I found this thread coincidental.

[yo mama]

I agree with Buffett. Status quo is unacceptable. But the current bill is not the solution. The real problem is that no one has both the political willpower and horsepower to change the way money money gets made in health care.

[Azazello1313]

you know, at that dumb little dog and pony show last week, one thing everybody on both sides said was that everybody agrees we have to cut costs in medicare, that there's lots of waste, fraud and abuse there, and so on.

 

ok, so fix it. without doing anything else, just fix that, because otherwise medicare is going to bankrupt the country. cut costs there. Medicare is a huge, single-payer, government-run program. It ought to provide the perfect environment for experimentation. If more-efficient government management can slash health-care costs by addressing all these problems, why not start with Medicare? Let's see what "better management" looks like applied to Medicare before we roll it out to the rest of the country.

 

the dems want to cut medicare spending, and use all the savings to pay for a new entitlement. which just passes the buck yet again on the coming fiscal crisis. well, actually worse than that, because it enacts all of the easiest cuts to medicare and leaves the long-term deficits in place. which means that much MORE has to be cut at some point in the future.

 

if government can fix the cost problem, schit, they already control half of the health care spending in the country. how about you fix that part before taking over the rest?

[westvirginia]

you know, at that dumb little dog and pony show last week, one thing everybody on both sides said was that everybody agrees we have to cut costs in medicare, that there's lots of waste, fraud and abuse there, and so on.

 

ok, so fix it. without doing anything else, just fix that, because otherwise medicare is going to bankrupt the country. cut costs there. Medicare is a huge, single-payer, government-run program. It ought to provide the perfect environment for experimentation. If more-efficient government management can slash health-care costs by addressing all these problems, why not start with Medicare? Let's see what "better management" looks like applied to Medicare before we roll it out to the rest of the country.

 

the dems want to cut medicare spending, and use all the savings to pay for a new entitlement. which just passes the buck yet again on the coming fiscal crisis. well, actually worse than that, because it enacts all of the easiest cuts to medicare and leaves the long-term deficits in place. which means that much MORE has to be cut at some point in the future.

 

if government can fix the cost problem, schit, they already control half of the health care spending in the country. how about you fix that part before taking over the rest?

 

There you go, making sense n stuff. The obamessiah would probably tell you that's not a real point, just a talking point.

 

The vampires (of all stripes) on capitol hill and at 1600 PA ave don't WANT to cut costs, they WANT to control the citizenry on an ever-increasing basis. Once they own access to the average american's HC, they own the average american.

[Ursa Majoris]

But I want to get re-elected. If I cut something, I won't get re-elected.

And this is true. So should we blame our politicians or our system......or us?

[Azazello1313]

And this is true. So should we blame our politicians or our system......or us?

 

either way, the answer is the same. stop voting for politicians who promise a government solution to every damn problem!

[Jimmy Neutron]

Boy, would I love to see this idea catch fire and change some minds in Washington.

[HowboutthemCowboys]

We'll duh, the great Obamassiah wants it to pass, what other reason does there need to be? If you disagree you area racist or of questionable intelligence.

Just like W's hunt for the WMD's right Perchy? Anyone that did'nt vote along with him for that was'nt a Patriot/hated America. How'd that work out for us? Your new avy fits you to a "T".

[CaP'N GRuNGe]

I didn't follow the entire summit, but here's a fact checking article on one of the GOP's stars on this issue, Paul Ryan:

 

http://voices.washingtonpost.com/ezra-klei...ue_cost_of.html

 

After the Blair House Summit, a bunch of you e-mailed to ask what I thought of Rep. Paul Ryan's argument that the bill "does not control costs" and it "does not reduce deficits." There's a lot going on in Ryan's remarks (which you can read here), so this might take awhile. But before we dive so deep into the weeds that we're seeing earthworms, here's the basic conclusion: Ryan's critique scores some clean points and also deploys a couple of dirty tricks, but it doesn't damage the bill's claim to reduce deficits and doesn't even engage whether the bill controls costs.

 

But let's begin at the beginning. Ryan says that "the true 10-year cost of this bill in 10 years" is $2.3 trillion. On this, Ryan is right, but misleading. In Ryan's favor, Democrats have artificially lowered the cost of the bill by pushing its start date back to 2014, even as its 10-year budget window begins in 2010. The 10-year cost of the bill is really only counting six years of operation. This was a deceptive effort to keep the bill's price tag under $1 trillion, even as the bill's price tag was really quite a bit more. Point for Ryan.

 

Ryan gets the $2.3 trillion by looking at what health-care reform will spend in 2019 and extrapolating that number out across the next 10 years. I'll trust that he did the calculation correctly. The problem is that Ryan uses the classic “This Is A Big Number" technique to imply that the bill is financially irresponsible, when putting the number in context would show just the opposite.

 

According to the Congressional Budget Office, the bill cuts the deficit far faster in the second decade than in the first. That's because the revenues and savings grow much faster than the spending. The bill might cost $2.3 trillion, but it either raises or saves $2.95 trillion, for a net deficit impact of negative $650 billion. So although Ryan uses the price tag to imply that the bill's spending is somehow worse in the second decade than in the first decade, he omits the information that's actually relevant for his presentation on cost control and deficit reduction.

 

I imagine the congressman would respond to my previous point by saying that he doesn't buy the CBO's estimates. His argument here has to do with how the federal budget is structured, or what's called "double-counting." And it's complicated, so bear with me.

 

 

Social Security and Medicare both have trust funds which are supposed to store money to pay for the program's future costs. If a new policy saves Social Security $50, and the government then doesn't have to borrow $50 that it would otherwise have had to borrow to pay for Social Security, that improves the deficit outlook by $50. With me so far?

 

But let's say that the government then takes that $50 from the trust fund and sends it over to an education program. From the perspective of what's called the "unified government budget" -- which is the budget we use -- there's no difference because the government is not borrowing any more money. To use an example Peter Orszag favors, from an accounting perspective, this is the same as a parent giving his son $50. The parent may be $50 poorer, but the family's finances are unchanged.

 

That trust fund, however, has to eventually be paid back. If you don't leave the money in the trust fund, then you have to assume that other programs will be cut later when the trust fund's debts come due. You have to assume, in effect, that you'll take the money back from your son, or from another part of the family budget. Otherwise, you're double-counting the cash, because you're assuming that it lowered potential borrowing for Social Security (count one) and for the education program (count two).

 

According to Ryan, there's about $124 billion in double-counted money in the bill. Assuming his math is correct (and no one I talked to said it wasn't), that's a fair critique. What isn't fair is to suggest that this is about the health-care bill. This is how the government does its accounting.

 

The money flowing into the trust funds is continually used to pay for other government priorities. And borrowing for other government priorities is not built into trust fund estimates, even though that borrowing also competes with the trust funds in the future (live by unified government accounting, die by unified government accounting). This was true when Rep. Ryan voted for the Medicare Prescription Drug Benefit and the Iraq War, and it's true now.

 

And many budget experts think it's the right way to do things. Though it's true that the trust fund will have to be repaid either through spending cuts or tax increases, the trust fund will be repaid. Otherwise, the government defaults and everything goes to hell. This assumption that the government will pays its debts is not only necessary for accounting purposes but also for, say, investing in Treasury bonds, or in the stock market, or any other facet of American economic life that presumes the continued fiscal soundness of the American government. You can argue, they say, that the government shouldn't use trust fund money to do other things, but that's not the same thing as saying the accounting shouldn't presume repayment.

 

But whether you think the accounting is right or its wrong, it's not playing fair to change it on the fly. By the rules that both Republicans and Democrats use, the bill cuts the deficit.

 

Wherever you fall on double-counting, $124 billion isn't much money in the scheme of this thing. Ryan gets his big money a few paragraphs later, when he makes a much more dishonest argument. The play here is simple, and it's beneath a politician of Ryan's reputation: He attaches the cost of fixing the Medicare Sustainable Growth Rate to the health-care reform bill.

 

For a longer explanation of this issue, head to this post. The short version: In 1997, Republicans passed the Medicare Sustainable Growth Rate into law. The provision created a simple equation meant to hold down Medicare costs and cut doctor payments when they rose. But the provision was passed when Medicare's costs were uncommonly low. Suddenly, SGR was forcing huge cuts rather than the modest adjustments that had been intended. So legislators began voting to delay implementation rather than cut doctor payments.

 

The first delay was passed in 2003, under Republicans. Then again in 2005, also under Republicans. Then in 2006, under Republicans. Then in 2007 and 2008, under Democrats. For those keeping count at home, this is a policy in a Republican bill that Republicans delayed three times and Democrats delayed twice. What's needed is to reform the system so we stop delaying it. And we will need to do that -- and this is important -- whether or not health-care reform passes.

 

To put this slightly differently, imagine you're buying a new house. But your old house needs $20,000 in roof repairs. You will have to pay for those repairs whether you move or whether you stay, because you can't have your roof caving in come the next heavy rain. Are your roof repairs part of the cost of the new house? If you think so, then you agree with Ryan. If not, then you don't. The SGR problem predates health-care reform and exists irrespective of health-care reform's fate. Attempts to lash the two together are nonsensical.

 

This has gone on long enough, so we'll address the final point quickly. Ryan says that the chief actuary of Medicare says the administration is bending the cost curve up. That's not quite what he showed.

 

Rather, health-care reform initially increases spending to cover the uninsured. That raises the level of spending, but not the curve. The curve actually flattens. If you extend the trend out to the second decade -- which is what Ryan does in other parts of his presentation, including for the $2.3 trillion figure -- the curve goes down. Kevin Drum graphed it here, concluding that "a decade after the reforms kick in, we'd be providing health care to at least 30 million more people and spending no more than we would if we did nothing," which is to say, the curve-bending elements of the plan would've saved enough money to cancel out the new coverage expenses.

 

To sum up, then, Ryan makes some good points about the true cost of the bill and realities of the federal budget. But he purposefully omits any mention of the bill's expected savings, disingenuously attaches the price tag of a broken Republican policy onto the health-care reform bill, and selectively stops extrapolating trends when they don't fit his points. It's a presentation designed to make the bill look less fiscally responsible than it really is.

 

But don't listen to me. Robert Reischauer is the head of the Urban Institute. He's also one of the CBO's most revered former directors, in no small part because his relentlessly honest cost estimates helped doom Bill Clinton's bill in 1994. I reached him earlier today and asked whether he thought this bill made fiscal sense. "Were I in Congress and asked to vote on this," he replied, "I'd vote in favor." The bill isn't perfect, he continued, "but it at least has the prospect for creating a platform over which more significant and far-reaching cost containment can be enacted."

 

The same cannot be said for the status quo.

[The Mucca]

Since when did an article written by a liberal author become a fact check article?

[BeeR]

Great interview that strikes right at the heart of the whole debate. Cost containment . . . .

Yeah that sure was a big revelation IMO he said a whole lot of nothing and showed a lot of political ignorance - 2 things I wouldn't have expected from him.

[Azazello1313]

grunge, ezra klein is one of the biggest obamacare cheerleaders out there. so any "fact check" he offers should be read with that in mind. but one bit I want to address...

 

But let's say that the government then takes that $50 from the trust fund and sends it over to an education program. From the perspective of what's called the "unified government budget" -- which is the budget we use -- there's no difference because the government is not borrowing any more money. To use an example Peter Orszag favors, from an accounting perspective, this is the same as a parent giving his son $50. The parent may be $50 poorer, but the family's finances are unchanged.

 

That trust fund, however, has to eventually be paid back. If you don't leave the money in the trust fund, then you have to assume that other programs will be cut later when the trust fund's debts come due. You have to assume, in effect, that you'll take the money back from your son, or from another part of the family budget. Otherwise, you're double-counting the cash, because you're assuming that it lowered potential borrowing for Social Security (count one) and for the education program (count two).

 

According to Ryan, there's about $124 billion in double-counted money in the bill. Assuming his math is correct (and no one I talked to said it wasn't), that's a fair critique. What isn't fair is to suggest that this is about the health-care bill. This is how the government does its accounting.

 

The money flowing into the trust funds is continually used to pay for other government priorities. And borrowing for other government priorities is not built into trust fund estimates, even though that borrowing also competes with the trust funds in the future (live by unified government accounting, die by unified government accounting). This was true when Rep. Ryan voted for the Medicare Prescription Drug Benefit and the Iraq War, and it's true now.

 

And many budget experts think it's the right way to do things. Though it's true that the trust fund will have to be repaid either through spending cuts or tax increases, the trust fund will be repaid. Otherwise, the government defaults and everything goes to hell. This assumption that the government will pays its debts is not only necessary for accounting purposes but also for, say, investing in Treasury bonds, or in the stock market, or any other facet of American economic life that presumes the continued fiscal soundness of the American government. You can argue, they say, that the government shouldn't use trust fund money to do other things, but that's not the same thing as saying the accounting shouldn't presume repayment.

 

But whether you think the accounting is right or its wrong, it's not playing fair to change it on the fly. By the rules that both Republicans and Democrats use, the bill cuts the deficit.

 

but by the same token, everybody knows what those "rules" are beforehand....so if there are ways to manipulate your bill to make it look like it's more deficit-friendly than it really is, well the only real check on that is for someone like ryan to point it out.

 

but even if you take it on faith that it WILL reduce the deficit....it's not going to reduce it by much. and a major point to remember here is that if it DOES cut the deficit, it will be a result primarily of big cuts in medicare spending versus current projections. and the hugh majority of those savings will be going to fund a new entitlement. and then it's that much harder to keep medicare from going bankrupt.

 

think of an analogy....a family's mortgage payment is set to go up $500 per month in the near future, and they decide OK we need to address this. they create a budget and look at it and figure out that this is $300 more than they can afford. so they cut everything they can, they get rid of cable, cell phone plans, they reduce their vacation budget....and they find $300 in savings. then they say hey, we just saved ourselves $300 per month, let's go lease a new car for $295 per month, we still come out ahead! ok. but now where are they going to come up with the money to pay the mortgage?

[Czarina]

There are already Medicare cuts afoot. They're cutting from the Home Health Care portion of medicare, which provides lower cost home nursing and therapy for medicare patients. The hospital lobbies are VERY strong. They want to centralize services within the hospital environment, which is very expensive, and easier for docs too.

[yo mama]

There are already Medicare cuts afoot. They're cutting from the Home Health Care portion of medicare, which provides lower cost home nursing and therapy for medicare patients. The hospital lobbies are VERY strong. They want to centralize services within the hospital environment, which is very expensive, and easier for docs too.

So what you're saying is that this is all Chargerz' fault. Interesting.

[untateve]

And this is true. So should we blame our politicians or our system......or us?

 

I don't know. I just like to vote for the lesser of two evils because I expect politicians to change when I reward them with my vote.

[yo mama]

I don't know. I just like to vote for the lesser of two evils because I expect politicians to change when I reward them with my vote.

You must be very used to disappointment by now.

[Ursa Majoris]

either way, the answer is the same. stop voting for politicians who promise a government solution to every damn problem!

The point I was making is that it's us who shout "hooray" for our senator when he brings home the $400 million pork project to his home state, it's us that want our SS and our Medicare, it's us that scream about cuts and it's us that howls about taxes.

 

Oh yeah - and it's us that focuses on the NEXT election as soon as the previous one is over so legislators spend less than half their time doing what we elected them for in the first place and more than half their time fund raising to go through the whole charade again.