As the Democrats try to pick up the pieces of the blown-up public option compromise and move forward on health reform, some on the left have thrown up their hands and claim that the bill as it stands isn’t even worth passing any more. Cue Howard Dean:

“The Senate version is not worth passing,” former Democratic National Committee Chairman Howard Dean told POLITICO, referring to plans to strip the latest compromise from the bill, a Medicare buy-in. “I think in this particular iteration, this is the end of the road for reform.”

Dean said there are some good elements in the bill, but lawmakers should pull the plug and revisit the issue in Obama’s second term, unless Democrats are willing to shortcut a GOP filibuster. “No one will think this is health care reform. This is not even insurance reform,” he said. [emphasis mine]

Does Howard Dean really think that Obama is a shoo-in for a second term — and, on top of that, will face a more favorable Congress then — if the health reform effort collapses? That the bill’s failure now would lead to better chances for passage later? As Kevin Drum wrote, “If healthcare reform dies this year, it dies for a good long time.”

The estimable Nate Silver offers some forceful policy commentary to shake some sense into his fellow progressives, comparing the different scenarios for a family of four earning $54,000 under the Senate bill, under the status quo plus inflation, and under the status quo plus inflation plus S-CHIP. The result, you won’t be surprised, is that the family by far fares best under the Senate bill. Some might rightly argue that the cost is still not so affordable if a member of the family gets sick. But the costs would be debilitating without health reform at all.

Ezra Klein, who’s been banging the drum for passage, gets it right:

“This is a good bill,” Sen. Sherrod Brown said on Countdown last night. “Not a great bill, but a good bill.” That’s about right. But the other piece to remember is that more than it’s a good bill, it’s a good start. With $900 billion in subsidies already in place, it’s easier to add another hundred billion later, if we need it, than it would be to pass $1 trillion in subsidies in 2011. With the exchanges built and private insurers unable to hold down costs, it’s easier to argue for adding a strong public option to the market than it was before we’d tried regulation and a new competitive structure. With 95 percent of the country covered, it’s easier to go the final 5 percent. And with a health-care reform bill actually passed, it’s easier to convince legislators that passing such bills is possible.

Let’s hope progressive activists maintain their perspective on the bill and listen to the wonks (a divide that Steve Benen wrote about yesterday). Medicaid, Medicare, and Social Security all had their inadequacies when originally passed. But those shortcomings were addressed over time. The same would go for health care reform. But first you have to pass a bill.

If you’ll forgive me for egregiously mixed metaphors, I want to draw attention to an implicit assumption among many health care reform advocates related to controlling healthcare spending: that if not for the politics involved, it would be fairly easy to rein in costs.

That’s because, the argument goes, there is easily identifiable inefficiency in the way we currently spend health care dollars. There are enormous regional disparities in, for instance, per capita Medicare spending. What is more, these differences are apparently unrelated to differences in the health of the underlying populations, and they don’t produce better outcomes. Rather, the differences reflect the ways that health care providers diagnose and treat patients in different parts of the country. So say the much-revered Dartmouth College health researchers, whose findings have been fairly uncritically embraced by many on the left.

Politics aside (the difficulty is that one person’s wasteful diagnostic test is another’s life-saving intervention), I always was suspicious of this argument. If there are excess profits to be made, then why is it that providers in only some parts of the country go after them or successfully extract them? Then a fascinating study came out that was mostly ignored but that should have raised questions about the Dartmouth research.

A potential problem with the Dartmouth research is that if there are unmeasured differences in health between patients who go to different providers, then the finding that greater spending is unrelated to outcomes could simply derive from people in worse health being very expensive to treat. The Dartmouth researchers use relatively crude measures to statistically control for these differences (because they are the only ones available).

MIT economist Joseph Doyle got around this problem by looking at patients who needed emergency care while they were visiting Florida. Because there is no reason to expect that unhealthy tourists are more likely to end up in higher-spending ERs, any differences in outcomes between those who went to high-spending hospitals and those who went to low-spending ones should reflect only the spending difference. Doyle found that higher spending did produce better outcomes.

Disparities in Data

Now MedPAC, the panel that monitors how Medicare reimburses providers and makes recommendations to Congress, has released a study that shows that disparities in Medicare spending are quite a bit smaller when other important factors — such as regional differences in wages and extra reimbursement related to medical education — are taken into account (hat tip to Mickey Kaus). If one looks only at per capita Medicare spending, high-spending areas of the country have costs that are 55 percent higher than low-spending areas of the country (I’m talking about the 90^th and 10^th percentiles, for those of you statistically inclined). After making MedPAC’s adjustments, however, that difference shrinks to 30 percent.

Thirty percent might still be considered a big number — in a perfect world adjusted spending shouldn’t differ at all — but other evidence in the MedPAC data gives reason to question the precision of any of these kinds of comparisons. I put the figures for all 404 geographic areas into a spreadsheet (which you can get from me if you’re interested — data wants to be free!) and looked at the top and bottom quarter of adjusted spending.

High-spending areas are dominated by the South, particularly the states stretching from Florida across to Texas and Oklahoma. They also include 15 of the 30 biggest metropolitan areas, including all of the biggest southern and midwestern metros, save Atlanta and Minneapolis, and none of the biggest northeastern or western metros, save Los Angeles, Las Vegas, Phoenix, Denver, and Pittsburgh.

On the other hand, low-spending areas are dominated by the West, particularly Alaska, Hawaii, Washington, Oregon, Idaho, and most of California (with the exception of Los Angeles and San Diego). Also overrepresented are small metropolitan areas in the upper Midwest and Dakotas, in New York, Maine, Virginia, and Georgia. None of the biggest ten metropolitan areas are represented in the bottom quarter, and only four of the biggest thirty are (San Francisco, Seattle, Portland, and Sacramento).

Compare these findings to those of the Dartmouth folks (Map 1). While many of the same conclusions show up in their map, there are some notable differences. Most importantly, California and the Boston-Washington corridor look like they spend a lot more in the Dartmouth map than they do in the MedPAC data (and the Mountain West states look like they spend a lot less).

Fixing Inefficiencies Not a Silver Bullet

If different sets of rankings differ as notably as these two do, then that says to me that there is a lot of noise in these rankings and that perfectly adjusted spending figures would potentially produce a distribution of areas that would look different from either set. In particular, I suspect that it would show that the vast majority of spending variation could be explained by factors that had nothing to do with inefficiencies.

The point is that even discounting the political difficulties of enacting policies that rely on comparative effectiveness research to weed out inefficiencies in healthcare spending, it’s not at all clear that regional variation in healthcare spending is proof that such inefficiencies exist. That’s not to say that there are no inefficiencies, but weeding them out won’t be as simple as making Florida providers act like Minnesota ones.

The views expressed in this piece do not necessarily reflect those of the Progressive Policy Institute.

The latest intra-progressive dustup over health care reform displays a couple of pretty important potential fault lines within the American center-left. One has to do with political strategy, and the role of the Democratic Party and the presidency in promoting progressive policy goals and social movements. I’ll be writing about that subject extensively in the coming days.

But the other potential fault line is ideological, and is sometimes hard to discern because it extends across a variety of issues. To put it simply, and perhaps over-simply, on a variety of fronts (most notably financial restructuring and health care reform, but arguably on climate change as well), the Obama administration has chosen the strategy of deploying regulated and subsidized private sector entities to achieve progressive policy results. This approach was a hallmark of the so-called Clintonian, “New Democrat” movement, and the broader international movement sometimes referred to as “the Third Way,” which often defended the use of private means for public ends. (It’s also arguably central to the American liberal tradition going back to Woodrow Wilson, and is even evident in parts of the New Deal and Great Society initiatives alongside elements of the “social democratic” tradition, which is characterized by support for publicly operated programs in key areas.)

To be clear, this is not the same as the conservative “privatization” strategy, which simply devolves public responsibilities to private entities without much in the way of regulation. In education policy, to cite one example, New Democrats (and the Obama administration) have championed charter public schools, which are highly regulated but privately operated schools that receive public funds in exchange for successful performance of publicly-defined tasks. Conservatives have typically called for private-school vouchers, which simply shift public funds to private schools more or less unconditionally, on the theory that they know best how to educate children.

Now clear as this distinction seems to “New Democrats,” there are a considerable number of progressives who think it’s largely a distinction without a difference, in education policy and elsewhere. And we are seeing that fundamental divergence on opinion on other, more prominent issues right now. On the financial front, the Obama administration reflexively pursued a strategy of regulation and subsidies for the financial sector, without modifying the fundamental nature of financial institutions, even as critics on the left argued for nationalization (at least temporarily) of key financial functions. At the more popular level, critics of TARP from the left joined critics of TARP from the right in deploring “bailouts” of failed financial institutions, even though the two groups of critics held vastly different views of the right alternative course of action.

Similarly in the health care reform debate, the Obama administration pursued legislation that utilized regulated and subsidized private for-profit health insurers to achieve universal health coverage. This approach was inherently flawed to “single-payer” advocates on the left, who strongly believe that private for-profit health insurers are the main problem in the U.S. health care system. The difference was for a long time papered over by the cleverly devised “public option,” which was acceptable to many New Democrat types as a way of ensuring robust competition among private insurers, and which became crucial to single-payer advocates who viewed it as a way to gradually introduce a superior, publicly-operated form of health insurance to those not covered by existing public programs like Medicare and Medicaid. (That’s why the effort to substitute a Medicare buy-in for the public option, which Joe Lieberman killed this week, received such a strong positive response from many progressives whose ultimate goal is an expansion of Medicare-style coverage to all Americans).

Now that the public option compromise is apparently no longer on the table, and there’s no Medicare buy-in to offer single-payer advocates an alternative path to the kind of system they favor, it’s hardly surprising that some progressives have gone into open opposition, and are using the kind of outraged and categorical language deployed by Marcy Wheeler yesterday. As with the financial issue, there’s now a tactical alliance between conservative critics of “ObamaCare,” who view the regulation and subsidization of private health insurers as “socialism,” and progressive critics of the legislation who view the same features as representing “neo-feudalism.”

To put it more bluntly, on a widening range of issues, Obama’s critics to the right say he’s engineering a government takeover of the private sector, while his critics to the left accuse him of promoting a corporate takeover of the public sector. They can’t both be right, of course, and these critics would take the country in completely different directions if given a chance. But the tactical convergence is there if they choose to pursue it.

For those of us whose primary interest is progressive unity and political success for the Democratic Party, it’s very tempting to downplay or even ignore this potential fault-line and the left-right convergence it makes possible. It’s also easy to dismiss critics-from-the-left of Obama as people primarily interested in long-range movement-building rather than short-term political success; that’s true for some of them. But sorting out these differences in ideology and perspective is, in my opinion, essential to the progressive political project. And with a rejuvenated and increasingly radical right’s hounds baying and sniffing at the doors of the Capitol, we don’t have the time or energy to spare in dialogues of the deaf wherein we call each other names while getting ready for the elections of 2010 and 2012.

This item is cross-posted at The Democratic Strategist.

Over at The Democratic Strategist, PPI Senior Fellow Ed Kilgore responds to my post on the public option. The impetus for my piece was the blogger Digby’s claim that the public option has “long since gone way beyond a policy to become a symbol.”

Ed notes that my post missed something important: that Digby is treating the public option as a symbol largely because that is what its opponents have done. Even in its weakened state, the foes of a public option have kept bashing away, transforming it into “a matter of pure power politics” that progressives like Digby believe the left must engage. From there, Ed argues that there is, in fact, less dividing progressives on the issue, that “if and when it’s sacrificed, it will be a matter of relative indifference to some of the ‘robust’ PO’s strongest supporters.”

I hope he’s right. For my part, my concern regarding the politics of the public option springs not from the fight over it but from what comes after passage. After acquiring such outsized status on the left, the absence of a public option — or the presence of a version barely recognizable to its supporters — in the final bill could well send progressives into despair over the administration and its achievement.

And that would be a shame. As Ezra Klein notes today:

It might have been a necessary thing from an activism point of view, but convincing liberals that this bill was worthless in the absence of the public option was a terrible decision, wrong on the merits and unfair to the base. The achievement of this bill is $900 billion to help people purchase health-care coverage, a new market that begins to equalize the conditions of the unemployed and the employed, and a regulatory structure in which this country can build, for the first time, a universal health-care system. Thousands and thousands of lives will be saved by this bill. Bankruptcies will be averted. Rescission letters won’t be sent. Parents won’t have to fret because they can’t take their child, or themselves, to the emergency room. This bill will, without doubt, do more good than any single piece of legislation passed during my (admittedly brief) lifetime. If it passes, the party that fought for it for decades deserves to feel a sense of accomplishment.

Mike Lux at Open Left also touches on this in a post today, posing the crucial question: “The deal on health care is about to get done: will progressives come out of it feeling like we got the first major progressive policy since the 1960s passed, or feeling like they got sold down the river?” If the public option becomes the standard by which health reform is judged, and there is a weak one or none at all in the final bill, then the latter seems likely. It would be nothing less than a tragedy if the progressive backlash against Obama and this Congress were to come on the heels of the passage of the most consequential progressive legislation this country has seen in decades.

In recent days, there seems to have been a shift in the progressive community over the question of whether the public option, in its current state, is still worth fighting for. Some on the militantly pro-public-option left aren’t responding well to the weakening front.

Over at Hullabaloo, the influential Digby gives the game away. She cites Ezra Klein, who wrote today:

Having something called a public option is not, in the end analysis, as important as achieving the goals of the public option, and at this point, the policy itself is getting so watered down that it might be worth attempting to achieve its goals in a more straightforward fashion.

But Digby is having none of that:

Ezra believes that if the votes aren’t there for a decent public option then the horse trading should be around getting something good in return for giving up the public option rather than negotiating the terms of the public option. That would make sense if the public option were just another feature of the health care bill. But it is not. It is the central demand of the liberal base of the Democratic Party in this rube goldberg health care plan and has long since gone way beyond a policy to become a symbol.

Perhaps that is wrong on policy grounds. People will argue about that forever. But that doesn’t change the fact that it is no longer a matter of policy but rather a matter of political power. And to that extent it cannot be “bargained away” for something like better subsidies, even if it made sense. “Bargaining away” the Public Option is also the bargaining away of liberal influence and strength.

[…]

Again, as a matter of policy I don’t know that the public option actually means much anymore. But as a matter of politics, it’s very important.

Let the boldness – and the destructiveness – of that declaration sink in. On the most important progressive policy achievement in a generation, Digby says forget the policy – it’s the symbolism that matters.

Digby argues that the implications of the public option extend far beyond health care, that “powerful people” are “desperate that the liberals are not seen to win this battle.” Funny, because I thought the way that progressives win this battle is by making health care accessible and affordable to millions of Americans who currently don’t have it. According to some very smart people, the public option is playing a steadily diminishing role in achieving that goal. But don’t tell that to Digby, whose position now boils down to: Why bother with policy advances when we can have symbolic victories (or, heck, defeats)?

From the start, PPI has argued that the fixation on the public option has been distracting us from the more important conversation we could be having about making the exchanges more robust. Paul Starr, in an op-ed for the New York Times on Monday, said as much in a column titled “Fighting the Wrong Health Care Battle”:

[G]iving the exchanges the necessary authority to regulate private insurers could solve many of the problems that motivated the public option in the first place. Strengthening that authority and accelerating the timetable for reform are what liberals in Congress should be looking for in a deal.

But Starr is, of course, commenting on policy. For Digby, that’s no longer what the health care debate is about.

Another week, another dozen reminders of the insanity that has engulfed the Republican Party.

First is this absolutely astounding poll from Public Policy Polling:

PPP’s newest national survey finds that a 52% majority of GOP voters nationally think that ACORN stole the Presidential election for Barack Obama last year, with only 27% granting that he won it legitimately.

Wow. The mind reels.

Then there was this gem from House Minority Leader John Boehner (R-OH) from yesterday, responding to the release of the Senate health reform bill: “What is even more alarming is that a monthly abortion premium will be charged of all enrollees in the government-run health plan.” That’s right – Boehner’s claiming that everyone in the public plan will be charged a monthly fee for abortions.

If that’s sounds a little fishy, that’s because it is. There is no such fee. In fact, the Senate bill requires insurance plans that offer abortion coverage to segregate their funds so tax money isn’t used to fund that coverage. The bill also states that every state’s health exchange must also offer one plan that doesn’t cover abortion. No consumer would be forced to fund abortions with their premiums. Not that the facts stop congressional Republicans these days.

And finally there was the bow heard round the world. Earlier this week, all conservatives could talk about was President Obama’s shocking bow to the Japanese emperor. Sean Linnane at Frum Forum, applying his expertise on bowing protocol, concluded that Obama “went WAY too low; it is only one step above a kow tow.” He added, “Compare Obama’s bow with how he conducted himself in the company of the Queen of England, and then contrast this with the way he leaned forward to bow and scrape before the King of Saudi Arabia; this certainly leaves a lot of room to wonder about which direction this man’s sentiments lie.”

That’s what conservatives have been reduced to: close textual readings of trivial moments. (And remember – this is from a conservative blog that’s supposed to be more moderate.) As if the right needed reminding of how out of step they are, a Fox News poll found that 67 percent of Americans approved of Obama’s bow — not that we needed a poll to underscore how inane the conservative obsession with the Obama bow is.

These reminders of the freak show on the right should remind progressives of what’s at stake. To put it simply: we are the only grown-ups in the room. We may be a fractious coalition, but the prospect of the other side coming back to power should be impetus enough to get us all to pull in the same direction.

Amidst general pleasure over the House´s passage of health reform legislation Saturday night, there´s also progressive angst over two issues: the narrowness of the vote, which leaves little or no margin for error when the conference committee report comes up, and the passage of the Stupak Amendment, which goes much further than previous House or Senate bills in restricting the ability of consumers to purchase abortion coverage in the new exchanges.

The first concern is probably overwrought. Speaker Pelosi clearly whipped her vote, and gave a free pass to vulnerable Democrats to vote “no.” Since the final version is likely to be less subject to conservative attack than the House bill, Pelosi should be able to hold all 219 Democrats and perhaps add a few.

The Stupak Amendment is more problematic, since 64 Democrats voted for it. But given the arcane nature of the differences between Stupak and earlier anti-abortion provisions, it’s unclear that any Democrats who voted for the House bill would vote against the conference report with a slightly less obnixious anti-abortion provision.

In any event, we should take a deep breath right now and appreciate the historic nature of the House vote, which didn’t look that secure until right before it occurred. Aside from its substantive importance, the vote should prove helpful in diverting the news media from ludicrous overinterpretation of the NJ and VA gubernatorial results.

The Congressional Budget Office has now weighed in on the House Republicans’ proposed substitute to the House health reform legislation. The results aren’t pretty.

According to the CBO, the GOP plan does little to expand coverage: 52 million Americans would remain uninsured by 2019, up from 50 million in 2010. Nor does the plan do anything to end insurers’ practice of denying health coverage because of pre-existing conditions. And forget about subsidies to help working-class Americans afford health insurance.

Ezra Klein sums up the CBO’s findings nicely:

CBO begins with the baseline estimate that 17 percent of legal, non-elderly residents won’t have health-care insurance in 2010. In 2019, after 10 years of the Republican plan, CBO estimates that …17 percent of legal, non-elderly residents won’t have health-care insurance….

But maybe, you say, the Republican bill does a really good job cutting costs. According to CBO, the GOP’s alternative will shave $68 billion off the deficit in the next 10 years. The Democrats, CBO says, will slice $104 billion off the deficit.

The Democratic bill, in other words, covers 12 times as many people and saves $36 billion more than the Republican plan.

But the plan does lower premiums, which is no surprise since sick people who need heath coverage the most will be left out of the system. So Republicans have that going for them.

At the beginning of this week on the health care front, one thing clear is that the differences between what the House and Senate are likely to vote on are not as large as everyone expected a few weeks ago. Harry Reid’s advancing a public option bill with (it appears) a state opt-out, and the House is going with a public option that will negotiate rates instead of pegging payments to Medicare. Had the Senate gone with a weak trigger or something like co-ops, or the House had insisted on the Medicare peg, it could have caused some very serious problems down the road.

However you happen to feel about the substance of these nuances, anything that steadily narrows the gaps between Senate and House Democrats is a step towards enactment of health reform this year. Or at least that’s how it looks to me from an internet cafe a very long way from Washington.

This item is cross-posted at The Democratic Strategist.