Comment: Drug Stupor

The Democrats have had a pretty good month.
President Bush has been unable to
hold Republican legislators on an array of issues ranging from oil drilling to
stem cell research. Particularly sweet was the Senate's passage of the
patients-rights bill, with nine Republican defectors voting aye. The vote is
awkward for the White House, which has threatened a veto that Bush doesn't really
want to deliver, and it demonstrates that the managed-care industry isn't 10 feet
tall. It also shows that Majority Leader Tom Daschle can play hardball--he
refused to let the Senate recess for its Fourth of July break until Republicans
consented to a final vote--and whets the Democrats' taste for more victories. As
the Italians say, l'appetito viene mangiando: The appetite grows the more
you eat.

But though Democrats prevailed on the crucial and divisive issue of whether to
allow patients to sue HMOs that deny necessary care, the bill is pretty weak tea.
It allows doctors to order expensive treatments, including drugs of choice that
are not listed in managed-care companies' formularies. But doctors can do that
now. The problem not addressed in the bill is the nefarious system of physician
compensation that HMOs have devised to get doctors to do their bidding.
Unapproved medicines, tests, and procedures simply come out of physicians'
paychecks. The patients-rights bill does not illegalize this perverse financial
incentive, so not much will change in the end.

As our colleague Marcia Angell-- former editor of the New England Journal
of Medicine
--observed in an op-ed article for The New York Times,
what's really wrong with U.S. health care is the fact that insurance is private.
The HMO industry takes 20 or 30 cents of every premium dollar for overhead,
marketing, executive salaries, and profit. The system pressures insurance
companies not to cover the sick but to contain costs at the expense of coverage,
prevention, and treatment. Though a useful slap at insurers and a good tonic for
Democrats, the patients-rights bill doesn't solve this problem. Only national
health insurance does.

To have an eminent doctor such as Marcia Angell come out foursquare for
universal health coverage creates what psychologists call cognitive dissonance.
If a serious person backs socialized insurance, either she's wrong or everyone
else is. Every sensible politician knows without thinking about it that national
coverage is out of the question: too expensive, too much big government, blah,
blah, blah. Yet most liberals--like most voters--know that it's what we need. Is
it too much to ask that the Democrats lead on this?

Soon, we are likely to witness a similar incremental "victory" on
prescription-drug benefits under Medicare. The final compromise will probably
provide far less than full coverage (and only for seniors, of course) and will
duck the essential issue of price controls. As writers Dean Baker and Merrill
Goozner have pointed out in these pages, it would make a lot more sense to have
government finance more of the research costs and shorten the period of patent
protection, so that prescription drugs would be universally available and
affordable. With the first generation of miracle drugs--penicillin, streptomycin,
and the polio vaccine--neither researchers nor drug companies got rich off
scientific breakthroughs, and costs stayed low. But such a vision, like that of
national health insurance, seems beyond the imagination of most mainstream
politicians. In this issue of the Prospect, Robert Dreyfuss sheds some
light on why this is the case: Congressional leaders are in bed with the affected
industries.

The Democrats' minimalism on health insurance is emblematic of their narrow,
ultimately self-defeating limitations on other issues. Take the matter of budget
and taxes. Ever since the great budget deal of 1997, most Democrats have
convinced themselves that being the party of fiscal rectitude was both good for
the Democrats' image and a shrewd ploy to prevent the Republicans from passing a
huge tax cut. This had to be the worst strategic miscalculation since the Maginot
Line. The fortifications were in the wrong place. Instead of contrasting tax
breaks for the rich with public outlays to benefit the broad electorate--this
strategy was ruled out as more tax-and-spend--the Dems were blathering on about
the (spurious) importance of paying off the national debt. Not surprisingly, the
voters were unmoved and Bush's tax cut subsequently sailed through Congress.

Now, the Democrats are doing it again. Even though the long-term forecasts
still suggest endless and rising surpluses, because of the economic slump
preliminary estimates indicate that revenues will be down and the budget could be
slightly in deficit this year. Democrats have pounced on this. You see! It
proves that the Republicans truly are profligate. But this is, again, the wrong
issue. Budgets are supposed to go into deficit during a slump. It's spending that
prevents the slump from deepening. The real question isn't whether to allow
temporary deficits but what the differences are in the two major parties' vision
and policy priorities for the country. And the deficit-hawk role undermines the
Democrats' ability to think big about what the country needs.

For now, policy minimalism can help energize the Democrats. Small victories
can build momentum and get the party's lumbering craft headed down the runway.
But it will take a much bigger updraft to achieve lift.

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