June 9, 2023
Dear Interested Readers,
We Avoided A Disaster
I was virtually holding my breath until President Biden signed the compromise bill that lifted the debt ceiling until January 2025 which puts it after the next presidential election. It is my hope that in January 2025 President Biden will have been reelected and there will be Democratic control of both Houses of Congress which will allow passage of a bill that frees us from these occasional moments of terror as we play Russian roulette with our economy. It is not prudent to have our national creditworthiness dependent on the ability to compromise with people whose political agenda seems to be to create economic chaos. Now that the possibility of us reneging on our debts has passed for a little while, I decided to ask my chatbot buddy for her impression of what might have happened to healthcare if June 5th had passed without a deal. Below is her answer:
I do not have access to real-time news or the ability to predict future events. As of my knowledge cutoff, President Biden had not signed a debt ceiling bill.
However, in general, the implications of a debt ceiling bill on healthcare could vary depending on the specific provisions and decisions made by lawmakers. The debt ceiling refers to the statutory limit on the amount of debt that the United States government can incur to finance its operations. If the debt ceiling is not raised or extended, it can lead to a government shutdown and potentially impact various sectors, including healthcare.
If the government shutdown occurs, it may affect the functioning of federal agencies and programs involved in healthcare, such as the Department of Health and Human Services (HHS), the Centers for Disease Control and Prevention (CDC), and the National Institutes of Health (NIH). This could result in delays or disruptions in funding for healthcare research, public health initiatives, and programs like Medicare and Medicaid.
Furthermore, a debt ceiling crisis could have broader economic implications that indirectly affect healthcare. It may lead to increased uncertainty and market instability, potentially impacting healthcare providers, insurance companies, and pharmaceutical manufacturers. Economic downturns can affect people’s ability to access healthcare services and afford necessary medications.
It’s important to note that the specific provisions and actions taken in a debt ceiling bill can vary, and the implications for healthcare would depend on the details of the legislation. To understand the precise healthcare implications of a debt ceiling bill signed by President Biden, it would be necessary to refer to the actual bill and subsequent analysis and commentary from experts and policymakers.
Based on my own reading before the bill was passed and signed, I think that my artificially intelligent friend has given us a pretty good picture of the disaster we avoided, and a preview of what could happen anytime we find ourselves facing the debt ceiling again. I bolded her statement that the current outcome depends on what is actually in the bill, and now that Biden has signed the bill, we can answer that question. There is a succinct answer in a June 5 post from the “Advisory Board”, a private healthcare industry news company. The article is entitled “America avoided a debt default. Here’s what that means for healthcare.”
President Biden’s agreement did preserve Medicare, Medicaid, Veterans’ benefits, and Social Security all of which Republicans would have loved to cut, but there were significant losses in the trade-offs which are well described in the article. You can’t cut federal spending by 1.5 trillion dollars over the next ten years without incurring some changes.
I have found descriptions of what is in the bill to vary and the result is somewhat confusing. It seems to be a mixture of wins and losses that are probably best described as “It could have been much worse.” Here is the core analysis offered by the Advisory Board.
The bill suspends the debt ceiling until January 2025 and cuts government spending by $1.5 trillion over the next 10 years, according to an analysis from the Congressional Budget Office. Specifically, the bill implements a 3% cap on military spending increases in fiscal year 2024, caps non-defense federal spending at $704 billion for the next two years, and provides $45 billion for a new program expanding coverage for veterans exposed to toxic burn pits.
It will also end a three-year freeze on student-loan payments, speed up large-scale energy and infrastructure projects [Making oil and gas leases easier and building a pipeline from West Virginia to mollify Joe Manchin] and raise the age by which able-bodied, low-income adults without dependents are required to work to receive food aid to 54 [Another concession to Republicns]
The bill also claws back nearly $30 billion in unspent COVID-19 relief funds from a number of programs under CMS, NIH, and CDC, among other agencies. The biggest recission of COVID-19 funds will be from the Public Health and Social Services Emergency Fund, totaling nearly $10 billion.
However, any “priority” efforts like funding for research into next-generation COVID-19 vaccines, long COVID research, and efforts to improve the pharmaceutical supply chain, are exempted from returning their funds, which will amount to around $5 billion.
While Republicans had wanted to impose work requirements on Medicaid, the compromise bill will not alter major federal health programs, such as Medicare, Medicaid, and other policies under the Inflation Reduction Act.
Ultimately, the deal will avoid a “catastrophic impact” on healthcare, where provider payments, patient coverage, and public health efforts could have been at risk under a default.
Congress.gov published a summary of the bill that has a little more detail with the major items as bullet points:
Fiscal Responsibility Act of 2023
This bill increases the federal debt limit, establishes new discretionary spending limits, rescinds unobligated funds, and expands work requirements for federal programs.
Specifically, the bill suspends the federal debt limit through January 1, 2025, and increases the limit on January 2, 2025, to accommodate the obligations issued during the suspension period.
In addition, the bill establishes new discretionary spending limits for FY2024 and FY2025 that are enforced with sequestration (i.e., automatic spending cuts). It also changes the limits to 1% below the FY2023 base funding levels if a continuing resolution is in effect on or after January 1, 2024, or on or after January 1, 2025, because all 12 regular appropriations bills were not enacted by the end of the prior year.
The bill also includes provisions that
- rescind certain unobligated funds that were provided to address COVID-19 and to the Internal Revenue Service;
- provide funding for the Department of Veterans Affairs Cost of War Toxic Exposure Fund;
- provide funding for the Department of Commerce Nonrecurring Expenses Fund;
- provide statutory authority through 2024 for the requirement for agencies that propose certain administrative actions that will increase direct spending to also propose at least one administrative action that will decrease direct spending by at least the same amount (commonly known as administrative pay-as-you-go rules);
- terminate the suspension of federal student loan payments;
- expand the work requirements for the Supplemental Nutrition Assistance Program (SNAP) and the Temporary Assistance for Needy Families (TANF) program; and
- expedite the permitting process for certain energy projects.
My own assessment is that it is likely that there will be some damage to the efforts to improve the social determinants of health and to slow the worsening of global warming. We can’t expect to improve housing, education, and access to care without spending more, and I think it is reasonable to say that if we see the benefit of spending more that there should be higher taxes on wealthy individuals and very profitable businesses to avoid growing deficits. This sort of approach that makes the most sense to me will probably never happen, and there is no chance at all for a different approach until there are Democratic majorities in both houses of Congress and a Democratic president.
In retrospect, the temporary benefits passed during COVID gave us a preview of what we could accomplish if we were serious about improving the social determinants of health and ending poverty. In those temporary bills, we granted larger child tax credits, supported housing with a block on evictions, and provided funds to support renters. Among the other extended benefits, payments on student debt were suspended, and we granted increased access to Medicaid without frequent review. Those actions objectively demonstrated that we could do much more to improve the social determinants of health and make big steps toward ending poverty. All of those beneficial programs did increase the deficit, but it is my opinion that the proper response to increased deficits was not to cut the programs but to increase the tax base to provide the benefits that will improve the vitality of our society.
If you don’t like the idea of increasing taxes, there is another option. We could drastically reduce what we spend on healthcare. We now spend 17% of GDP or more than $12,000 per year on each person which is over 4 trillion dollars per year. At 11% of GDP or less than $5000 per year per person, France spends more of its GDP on healthcare than any other European country, but about half of what we do. The average healthcare expense in the EU is about 10% of GDP and all of those countries have universal coverage and better health outcomes than we do.
For our 17% of GDP, we get much poorer results. Are we stupid, incompetent, or just being ripped off by the combination of an aggressive medical-industrial complex and a misguided culture that requires that we maintain a minority in poverty to advantage a wealthier majority which is Matthew Desmond’s thesis? If our healthcare system performed as well as the worst European system with a focus on universal coverage, improved primary care, and attention to the social determinants of health, we could eradicate poverty and improve our health without a radical increase in taxes. That was always the point Bernie Sanders and Elizabeth Warren were trying to make. Unfortunately, we seem to be more inclined to cut benefits to the poor than to exert the necessary effort to improve the financial performance of our healthcare system by first introducing universal coverage with better primary care and then eliminating outrageous profits for drug and device manufacturers and to self-impose the discipline to eliminate overuse, misuse, and waste in our delivery system.
We have known for a long time what the problem is, and have had a blueprint for the solution for over twenty years. We just don’t seem to have the collective will to do the work that would produce a more efficient and effective system of care. Cutting what we do for the neediest among us is our preferred response to increasing expenses. I believe that it is also true that our focus on the finances of individual institutions and providers rather than the health needs of populations is a formula for inefficiency and avoidable expense. I believe that we are on a road that is worse than the one the House Freedom Caucus thinks we are on. As Stein’s Law implies, if something can’t go on forever, it won’t. The outcome will not be a self-correcting system, it will be continuing decline of benefits for the most vulnerable which eventually will lead to greater problems for all of us.
The header for this post is the “Pont du Gard,” the massive Roman aqueduct built 2,000 years ago to bring water more than 50 km to the city of Nîmes, France. It is more than three football fields long and it looks as sturdy today as when it was built. The structure has lasted twice as long as the empire that built it and looks like it will be around for another thousand years or more. In his book How the Irish Saved Civilization, Thomas Cahill begins by describing the fall of the Roman Empire. As the 1995 New York Times book review reveals, the fall of the Roman Empire did not occur because of the loss of some great battle. In the book, Cahill describes how it fell through its internal collapse of values. Richard Bernstein writes in his review:
Mr. Cahill’s book strikes some Gibbonesque themes, especially that of spiritual decay, the gradual loss of vigor, the onset of a static, effete, imitative and self-satisfied Roman world.
Mr. Cahill’s technique in this is to focus on some figure who marks the era. The poet and professor Ausonius, who lived in Bordeaux in the fourth century, is his representative of Rome’s slide into emptiness and decay.
I remember reading Cahill’s description of the fall as a cautionary tale for our times. Sustaining greatness requires paying attention to everyone’s needs and making hard choices. The Fiscal Responsibility Act of 2023 was a compromise solution that gives us the chance to do better, Our problem seems to be a lack of consensus and the political will to do better. The health and success of future generations require that we find that will.
COVID Isn’t Over
My wife and I had gotten pretty smug over the past three years about how effectively we had avoided COIVID. We wore our masks when we were out. We avoided crowds. I gave up going to Red Sox games. We did not go to the movies and rarely went to restaurants. When we did eventually fly in April, we wore our masks. As we prepared to finally take a vacation in France with two other couples, we got a second booster. Everything went as planned for us until the last night on our river cruise when I got a scratchy throat and began to feel like I was getting a cold. A few hours later my wife started to have similar symptoms. Another travel pal became very symptomatic on our flight back to Boston and decided to get tested for COVID, and he was positive. After hearing that our friend was positive, we tested and were also positive. One of our other travel companions had been ill with a headache and other flu-like symptoms two days earlier which caused her to stay on the boat for a day, but then she rallied enough to enjoy our last day in Arles. She also tested positive for COVID when she got home to Florida. So far, of the six people in our party, four have tested positive for COVID.
In retrospect, I guess it is not a surprise. There were about one hundred tourists on the boat plus a large staff. We made many excursions on buses. I remember only seeing one person ever put on a mask. I think that everyone was laboring under the false impression that COVID was over when it is not.
We are now on Paxlovid. My symptoms are hardly worse than the cold that I thought I had. Fatigue and mental fogginess are prominent and may explain any typos you might find in this letter. I hope that the vaccine and boosters are protecting me from the fate so many other older Americans experienced two years ago. My wife has been a little more symptomatic than I have been with her bad headache. I hope that both of us will be back to “normal” in a few days. Ironically, our forty-year-old son in California who does some traveling with his work has come down with his third and worst episode of COVID after a trip with our youngest son who has also already had COVID and is now isolating himself waiting to see what happens. The forty-year-old has been short of breath and had to go to an ER where he was put on albuterol.
It was the most quoted philosopher of the twentieth century, Yogi Berra, who said, “It ain’t over til it’s over.” I think that is true in sports and seems to be true when it comes to COVID. Based on the reality that an official announcement that the threat was over which was possibly motivated by economic concerns that the pandemic was generating worldwide economic damage was more hope than fact, I will be back to wearing my mask when I am better. I don’t want a second or third challenge as my son and others have experienced.
I hope that my experience might give you some second thoughts about your own risks so that you can…
Be well,
Gene
