Friday, November 10, 2006

An Election Bonus: The Death of TABOR

Well, at least as dead as any political idea can get. I'm sure we'll see another TABOR incarnation at some point, but, at least in the near future, the proposal is as dead as privatizing social security.

Make no mistake, if the outcome of the election was different, we'd be fighting the same TABOR battle that was fought this past spring.

The tallest roadblock for TABOR now is the Dem-controlled state Senate. Last session's version of TABOR couldn't even pass the Republican-controlled state Senate, so it seems safe to say it will never get by the Dems.

But even setting that fact aside, there are more subtle ways TABOR was rejected on Tuesday.

Recently, conservatives in Waukesha County formed the Wisconsin Center for Economic Properity (WCEP) with the sole purpose of electing politicians in the state who are friendly to writing restrictive fiscal policy into the state constitution.

In the latest election cycle, WCEP gave money to 13 legislative candidates. Eight out of those 13 lost their races, which included one incumbent and four open seats (three of which were previously controlled by the GOP).

Another TABOR proponent, Wisconsin Manufacturers and Commerce, didn't fair any better. The state's biggest lobby group ran ads in 10 legislative races this year that either attacked anti-TABOR candidates or supported pro-TABOR candidates. The WMC-chosen candidate lost in 8 of those 10 races, which included three incumbents and three open seats (two of which were previously held by the GOP).

Even outside of Wisconsin, TABOR was stomped on election day. In three states that held statewide referendums on the initiative -- Maine, Nebraska, and Oregon -- all were defeated by an average of 30 points (the margin was actually relatively close in Maine at 8 points).

Just another reason to smile this week.


Side-Note: If you want to see some disagreement on this point and others involving the election results, I encourage you to attend the FREE "Download 2006" event that's being co-sponsored by One Wisconsin Now and Boots & Sabers.

The event will feature a panel of bloggers from the right and the left. Owen and James will be two of those bloggers from the right, and each share a different assessment than me on the role TABOR played in Tuesday's elections.

Both Owen and James feel that the Dem takeovers in the state were a result of the GOP not passing TABOR, as opposed to a rebuke of the idea itself (among, of course, others) as I do.

Although I don't see TABOR supporters staying home on election day (especially in light of the huge voter turnouts statewide) or thinking to themselves, "Well, the GOP didn't write fiscal policy into the state constitution like I wanted, so I'll try the Democrats," I suppose those are the type of disagreements that make for good debate.

Here are the details for Download 2006:

Date: Saturday, November 11 (that's tomorrow!)
Time: 11:00am-2:00pm (the panel starts at noon)
Location: Waukesha County Technical College, Richard T. Anderson Education Conference Center, 800 Main Street, Pewaukee (see here for directions)

Please RSVP to if you plan to attend.


Blogger Russ said...

Congratulations Seth, now you, along with your tax and spending crowd, can continue to raise property taxes in spite of the fact that Wisconsin median household income is flat. What do you call that, "taxing those even when they are unable to pay". Or do you admit the obvoius and say "let's tax the poor".You should be proud.

November 10, 2006  
Blogger Seth Zlotocha said...

Settle down, Russ. I'm sure it's been a tough few days for you, but try to go back and re-read what I actually wrote. If you see anything about raising taxes in there, let me know.

As I said in a comment to my last post, as much as conservatives refuse to believe it, Dems are not about raising taxes.

Dems, like myself, prefer to consider taxes under the larger framework of public finance. Sure, we can cut taxes, but the important questions are really how and where, and to consider all of those things is to consider public finance.

All Dems in the state (at least those holding public office) are absolutely opposed to writing restrictive fiscal policy into the state constitution. Many Republicans oppose this idea, too, but a good number also support it...and do so quite vehemently.

In my mind, there are better ways to limit taxes than simply setting an arbitrary cap on revenue or spending that usurps local control. For instance, comprehensive health care reform -- if done correctly -- can result in significant revenue savings for governments and private industry alike by reducing administrative costs and increasing the purchasing power of payers in the system.

Take the health care reform proposal by state Senator Russ Decker (D-Schofield) and Rep. Terry Musser (R-Black River Falls) that was completely ignored by the GOP legislature. The county executive in Fond du Lac estimates the plan could save his county $3.5 million per year in health care costs -- and that's just in relatively tiny Fond du Lac County. The savings in other larger governmental entities would be even greater, subsequently saving revenue that is becoming more and more scarce because of, you guessed it, rising health care costs.

The Decker/Musser plan would also save private industry millions each year. Mike Rayome, who is the regional human resources manager for Graphic Packaging International, estimates the plan would save his company $2.88 million per year in health care costs -- which is a savings of 60% from what it pays now. And that's just at the company's Wausau facility. The savings would be even greater if the company's Menasha site was included in the calculations. (The Wausau Daily Herald is blocking me from accessing the article without paying for it, but if you're interested, the article is called "Bill Creates Insurance Pool for State" by Amy Olson and it's from the May 2, 2006 issue.)

That's the way you lower taxes -- through setting policies that create efficiencies wherever possible. Sure, it won't work for everything, but it can work some of the time. And one of the big things it can work for is health care, which happens to be the most daunting cost facing entities in both the public and private sector. The GOP route of arbitrarily setting caps on revenue and expecting efficiencies to naturally flow from it is flawed, unrealistic, and irresponsible. Efficiencies, and subsequently revenue/tax savings, come from specific policies, not blanket restrictions.

November 10, 2006  
Blogger atarijpb said...

Seth -

You are too kind to spend the time trying to educate. Just tell him to stick it. So much for trying to work together!

I'd love to attend the Download 2006 event, but I have a HS State Swim Meet to go and watch! Have fun!

November 10, 2006  
Blogger Seth Zlotocha said...

Thanks for the comment, atarijpb. I do try to help whenever possible.

You missed a good Download 2006 event. The video should be up within the next few days at One Wisconsin Now's website, if you're still interested in checking it out.

November 11, 2006  
Blogger Russ said...

If only additional government intervention in health care would solve the problem as you suggest.
I'm 62 y.o. and was about 40 when the government finally dergulated the telecom
industry. The AT&T monopoly was history overnight. In the years since we went from 25 cents a minute in 1984 to call Chicago to 5 cents a minute to call Europe. It goes without saying competition made telecommunications the affordable dynamic innovative industry it is today.

The same would happen with health care IF the government would legislate a truly competitive health care system. It would start with the basics, price lists for services provided. I'm not saying that would be easy mind you, because 50% of Americans already receive taxpayer financed healthcare. Weaning them off of FREE health care would be tough, but it is possible.

When I was a young man Blue Cross / Blue Shield had a virtual monopoly for health insurance because practiced community rating. You could walk with terminal cancer and receive their standard rate. Then the cherry pickers came in and lured away the healthy people with lower rates. The government could have mandated community rating but they did not and the rest is history.

The point is we once had an affordable health care model provided by a private company BECAUSE Blue Cross voluntarily community rated.

The cost benefits of competitive health proceedures are obvious. The cost of eye lasik proceedures has dropped like a stone. Heart scans are available for $200 cash.

Competition is the key to all services Americans need, including health care.

November 12, 2006  
Blogger Seth Zlotocha said...


Your analogy between the telecommunications industry and healthcare is lacking.

The telecommunications industry and the health care industry are just not the same. You pay directly for your telecommunications service, but it's likely you don't pay directly for your health care service (I imagine you have insurance like most people).

Because most people work through insurance companies for their health care, they receive discounts on that care based upon what their insurance companies can negotiate for them. The more people you have in a plan, the greater the discount. That's why the state has had such great success negotiating inexpensive healthcare for state employees (at least relative to the costs paid in the private sector).

Plus, one of the greatest burdens on the health care system today is administrative costs. Providers are forced to have huge staffs simply dedicated to sifting through the myriad of health plans out there. It's estimated that 1/3 of US health care costs go toward administration, whereas single payer countries only spend about 15-16 percent on administration -- and they're still able to insure their entire country. That's a huge savings the US is missing out on because of our multiple payer system.

Even beyond that, the simple make-up of health care doesn't play well for so-called consumer-driven health care models. Take Milwaukee County, where there are about 4 hospital systems in the county (Columbia St. Mary's, Aurora, Wheaton Franciscan, and Froedtert). Most people don't have the ability to "shop around" much for care -- they're pretty much stuck in a particular system, either by geography or by their insurance company.

Added to that, studies have shown that even when people do have access to health care prices, they don't take the time to "shop around" for care, either because it's too time consuming or impossible. And getting accurate prices for health care upfront is nearly impossible because providers can never guarantee what procedures will be necessary ahead of time. Some patients heading in for a routine appendectomy, for instance, may need to stay in the hospital for a week if the appendix leaked fluid prior to removal. There's just no way to account for all of the abnormalities that take place before care ensues. And, what are you going to do, back out of an operation once it's begun to add up the new total?

The fact is the only sure way to lower the cost of health care and insure the millions of Americans who currently go without it is to strip the current system of its administrative inefficiencies and increase the purchasing power of payers in the system by pooling those payers. And the only way to do that is by fundamentally reforming the health care system to provide all citizens with comprehensive health care.

Note: I'll provide links for everything I say here when I have more time tomorrow.

November 12, 2006  
Blogger Seth Zlotocha said...

The citations, as promised:

State's great success negotiating lower prices on health care by pooling employees here.

Administrative costs creating burdens on health care system here, here, and here.

Study showing people don't "shop around" for health care even when pricing is available to them here.

Statement on difficulty of achieving accurate health care pricing here.

November 13, 2006  
Blogger Russ said...

A agree, we must improve administrative inefficiencies. Standardizing claim forms will help that effort. That can easily be accomplished with legislation. In addition, electronic patient records would greatly improve admistrative efficiencies. ALL healthcare system costs, including the cost of health insurance providers, must be kept in check. Consummer driven market forces are the best way to achieve that goal. Allowing ANY portion of our health care system to be monopolized will eliminate the cost containment component. As I said before, monopolies have no mechanisism to control costs. President Nixon tried price controls. It was a complete failure. History has taught us that competition is the ONLY mechanism that works.

November 13, 2006  
Blogger Seth Zlotocha said...


It's not the format of medical coding that's causing administrative inefficiencies, it's the hundreds of different negotiated discount rates that exist. The only way to get rid of those inefficiencies is to have a single negotiated discount -- in other words, pool everyone under a single plan.

The way costs are controlled under single payer would be through government intervention -- to say that's impossible makes no sense. The proposals before the state legislature in Wisconsin would create a nonpartisan board to oversee the negotiations with providers, similar to how the state health insurance plan works now.

Simply saying that competition will work doesn't make it so, Russ. Proposals currently on the table in Wisconsin have been shown to provide savings, and all involve consolidating the number of payers in the system.

Other countries that have single payer pay 1/2 of the cost of health care per capita than the US, and they manage to insure all of their citizens, have a healthier public, and experience higher satisfaction rates (see here) than the US.

If you want to make a plug for competition, fine, but it helps to back it up with some evidence that it works in relation to the US health care system (as opposed to telecommunications or some completely different industry).

I'm not about attacking competition or capitalism in my advocacy, I'm just interested in what works -- I could care less how it gets done ideologically. You need to ask yourself, do you feel the same? Is this about solving the health care crisis for you, or is it about defending a pre-determined ideology?

November 13, 2006  

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