A very, very fluid situation

I was too busy to really comment on the Blue Dog letter story this morning, but I had noticed how minor many of their grievances with the public plan were. Rep. Heath Shuler, in particular, is one who complains about the lack of health services in our rural districts. Read on.

dday runs down and comments on their complaints:

What's interesting about the letter is how insignificant the changes actually are. Among other things, they want:

• a deficit-neutral policy, which is what every single proposal for this bill has included;
• aggressive solutions to bending the cost curve, which also is a goal of pretty much everyone;
• protecting small businesses, which every iteration of the plan has, including the employer mandate proposals that exempt certain small businesses and make them eligible for purchasing health care through the insurance exchange;
• rural health equity, a pretty small point;
• a public option that doesn't use Medicare bargaining rates, which isn't different from what, for example, Chuck Schumer has called for, although I find that to be a toothless public option, which I'll explain later;
• time to read the bill, which I support;
• bipartisanship, which is the most ridiculous of these demands, but which actually does exist in the bill on the Senate side, where dozens of Republican amendments have been included in the HELP Committee markup.

Obama himself professes to want a deficit neutral plan, so many of these points, I believe, are posturing either for political points or amendments to sweeten the cost of securing their votes, or both.

At the Wonk Room, Igor Volsky notes:

More importantly, the letter contains an inherent contradiction: the Blue Dogs want to find more savings within the system — they’re asking for Delivery System Reforms and “maximizing the value of our health care dollar” — but they’re also asking the bill to spend more on rural health and physician reimbursement. And they are reluctant to support any legislation that moves us towards that goal, causes providers to lose revenue, or regulates the system to improve efficiency.

Consider their objection to a “Medicare-like” public option that reimburses providers 5 to 10 percent above Medicare rates. According to MedPAC, Medicare rates are adequate and consistent with the efficient delivery of services. In fact, over-payments by private insurers to health-care providers drives up overall costs. “Hospitals which didn’t rely on high payment rates from private insurers ‘are able, in fact, to control their costs and reduce their costs when they need to’ and ‘combine low costs with quality,’” Glenn Hackbarth, the chairman of MedPAC, said during recent testimony in front of the House Ways and Means Committee. Moreover, if the public plan pays bloated market rates, it will fail to offer lower premiums within the Exchange, and would cause the government to spend more money on subsidies. [Emphasis mine]

Also today, more Blue Dog news:

More than 60 Democrats signed a letter authored by freshman Rep. Debbie Halvorson of Illinois and second-term Rep. Heath Shuler of North Carolina asking Waxman to jettison his plan to reinstate drug price controls to help low-income seniors. Instead, they are asking Waxman, Rangel and Education and Labor Chairman George Miller (D-Calif.) to support the drug industry’s offer to spend $30 billion help cover those costs – a deal that is backed by the White House and the Senate Finance Committee.

Waxman wanted to reinstate the price controls to save the government tens of billions of dollars over the next decade – money currently paid to prescription-drug makers – so that he could plow those savings back into the system and close a sizeable gap in the current government-funded prescription-drug program. The industry was hoping to avert such controls by pledging $30 billion to help seniors and another $50 billion to help pay for health reform.

$30 billion and then another $50 billion? Out of the goodness of their hearts? Whaddya figure these public-spirited drug makers would rather spend $80 billion and take hefty tax deductions on those costs rather than take the hit to their gross incomes from Waxman’s cost controls? Screw saving taxpayers billions in drug costs up front. That’s the small-government, free-market way. Thanks, Heath.

But wait. Just in, some of the New Dems (DLC-type centrists) are going in another direction:

A band of 22 New Democrat and Blue Dog lawmakers say they support a “robust” government-run health plan, boosting chances of moving healthcare reform with a public insurance plan through the House.

Democratic centrists remain the biggest obstacle to House Speaker Nancy Pelosi’s (D-Calif.) ability to pass a healthcare bill with a public plan, and many conservative Democrats oppose a public option as unfair to private insurers.

But the letter from the 22 New Dems and Blue Dogs indicates opposition from this group is far from universal.

[…]

The 20 New Democrats on the letter represent nearly one-third of the 68-member caucus. It is signed by two Blue Dogs and three members who are both New Dems and Blue Dogs.

See Blue Dog Rep. Loretta Sanchez comment on why she opted out of the letter:

This situation is very, very fluid.