Now that Donald Trump has won the New Hampshire primary and proved himself as a legitimate threat to win the Republican nomination, it's time to take a serious look at his policy proposals. When it comes to healthcare, Trump hasn't had much to say of substance, but the policy pronouncements we have gotten from him are a mix of socialism and incoherence.
For decades, Trump has shown a soft spot for socialized medicine. In his 2000 book The America We Deserve, Trump described himself as a "liberal" on healthcare and suggested the U.S. should look to Canada's socialist system as a "prototype." During a Republican presidential debate, he said the socialist systems in Canada and Scotland worked well.
During an interview on "60 Minutes," last September, Trump said, "Everybody's got to be covered. This is an un-Republican thing for me to say because a lot of times they say, 'No, no, the lower 25 percent that can't afford private.' But ... I am going to take care of everybody." Asked who would pay for it, Trump said, "The government's gonna pay for it."
He's talked about government using its bargaining power to negotiate prices with doctors, hospitals and drug companies — one of the central arguments in favor of socialized medicine.
Whenever he's been confronted on his socialist healthcare ideas by Sen. Ted Cruz, Trump has called Cruz a "liar" and said he wants to repeal Obamacare and replace it with a free market alternative. Yet when he actually speaks about healthcare, he reveals he has no idea what he's talking about. He rambles nonsensically, throwing out terms here and there that perhaps he's picked up in briefings, but they make no sense in the context which he's using them.
For instance, at a Monday night rally I attended in Manchester on the eve of the New Hampshire primary, Trump went on an extended rant about healthcare that made little sense and was filled with misinformation. You'll have to forgive the extended quotes, but it always takes awhile for Trump to get to his point.
He said, "So, my friend calls me up — a great doctor. He says, 'You know Donald, you're running and you're doing great and I'm so proud of you.' I love to hear it. I say, 'Say it again.' And he said, 'But you know, with the medical, and with the drugs, the United States is the largest purchaser — and they don't negotiate price.' It's almost as if you wanna go, and you wanna buy drugs, these drugs to make you feel better, right? Drugs to make you feel better. You wanna buy drugs, you have to get drugs, you go to the drug store, you buy it off the counter.
"The United States is paying like a price like that. I said, you have got to be kidding. He said, 'I don't know why.' I said, 'I do. I do.' Because the drug companies have an unbelievable lobby. And these guys that run for office, that are on my left and right and plenty of others, they're all taken care of by the drug companies. And they're never going to put out competitive bidding. So I said to myself wow, let me do some numbers. If we competitively bid, drugs in the United States, we can save as much as $300 billion a year."
A few things jumped right out at me. Trump says he'd save as much as $300 billion a year on drug costs through negotiation. And yet in 2014, Medicare spent about $78 billion on prescription drugs — and if you combine all of the spending on prescription drugs both by government and private sector you only get $297.7 billion. So in other words, Trump is suggesting that by negotiating drug prices through Medicare, he'd somehow negotiate all spending on prescription drugs in the U.S. — both inside and outside Medicare — down to zero.
Furthermore, Trump throws around the term "competitive bidding" to make it sound like he knows what he's talking about, but in reality Medicare already does use "competitive bidding" in the prescription drug program. Insurers negotiate with drug-makers, then offer bids for how much drug plans will cost, and then Medicare pays 75 percent of the average plan on behalf of the beneficiaries. The term "competitive bidding" doesn't make much sense in the context of the government negotiating directly with drug companies.
In reality, there's actually a great dispute over the potential savings from direct negotiation of drug prices. The CBO has suggested only limited potential savings if any from direct price negotiation. One problem is that unlike insurers, the Department of Health and Human Services would be under political pressure to include certain drugs — from AARP and other pressure groups — and that would reduce their leverage. The issue of drug negotation has long been pushed by liberals, and even then, liberal advocacy group Public Citizen estimated it would only save about $16 billion a year, or about one half of 1 percent of the $3 trillion the U.S. spends on all healthcare.
But Trump's rant didn't end there. He continued, "We need really smart, really tough, really fair people with great hearts that wanna take care of your healthcare, wanna take care of your people that can't afford healthcare. You know, it's interesting. We're going to bring down the price of healthcare. We're going to bring it down big league. Big, big league. Because President Obama lied — 28 times. He said you keep your doctor, said you keep your plan. 28 times. I kept saying, why doesn't anybody get sued for fraud when you do that? 28 times. And even Democrats went because of what he said. And they wish they weren't in that position. So he lied."
Okay, so Trump is arguing that Obama lied, and yet he's the one going around telling people he's going to reduce all spending on drugs to zero through his awesome negotiation process and say he's going to extract massive savings on healthcare — a policy puzzle that has vexed experts for decades — without saying how.
More Trump: "But, you know what? A lot of people are giving me heat, because I say, we gotta take care — there's a group, there's a small group relatively, of people at the bottom that are not going to be able to be taken care of — and I say, we have to, as Republicans, we to have to take care — does anybody not want to take care of them?"
Trump is being a bit vague by saying a "small group relatively." What does he mean by small group? What income level would be the cutoff to obtain Trumpcare? Remember, in the '60 Minutes' interview cited above, Trump said, "Everybody's got to be covered." Not just, "the lower 25 percent that can't afford private." Yet now he's saying he's talking about a "small group." Even before Obamacare, Medicaid existed and covered 56 million people living in poverty — not exactly a "small group." So is his "small group" greater or lesser than that?
Trump did not stop there: "I said, we're not gonna have people dying on the streets. We're going to get them into a hospital and take care of them, we're gonna — because we're not going to have people dying in streets. And I say that, and all the times I get applause and then they say, 'Oh, he wants to do this, he wants to do that, that's not the public —' let me tell you, the Republican way is, people can't take care of themselves, we have to help them. We're not going to let 'em die. And I say it all the time. We're not going to let 'em die on the sidewalk. We're not going to let 'em die on the street."
This is a total non-sequitur. The idea of not letting people die on the streets is not relevant to the current healthcare debate. Even before Obamacare, as I noted, people living in poverty had access to Medicaid and over 50 million seniors were enrolled in Medicare. And in 1986, Congress passed the Emergency Medical Treatment & Labor Act, which required hospitals to treat people who had medical emergencies regardless of ability to pay.
Then Trump went on, "And it's not even a lot of money. We have hospitals doing no business. We gotta get them fixed up. But we're going to save tremendously on healthcare. It's going to be private. We're going to take the lines out of play. We're going to have so many different options. It's going to be so much better. It's going to be less expensive."
A few points there. He says "it's not even a lot of money." What is he talking about? Before Obamacare's 2014 implementation, the U.S. government was already spending nearly $900 billion on health programs. He said hospitals are going to get fixed. Well, who is going to pay for that? Who is "we" in that statement? How is government paying for private hospital repairs consistent with the guy who said he's going to take on the drug lobby? How is he going to save "tremendously" on healthcare? And how is it going to be "private" when he just said government has to take care of people — and on '60 Minutes' said government has to provide healthcare for everybody?
I can only assume "we're going to take the lines out of play" is some sort of reference to allowing for interstate purchase of insurance, but it's clear he doesn't have a particularly firm grasp of that concept. He promises more choices and less expensive insurance with more coverage, yet he doesn't explain how that will come to fruition.
He went on, "You looked at your deductibles, not only are your rates going up, but you look at deductibles right now, unless you get hit by a tractor, you'll never, ever, ever be able to use your healthcare ... We're gonna take care of it folks, and we're gonna have so many great things. And by the way, we're going to competitive bidding. And I'll tell you what, we're going to save so much money those drug companies are gonna hate me so much."
The issue is, however, that many free market proposals hinge on the idea of encouraging the use of higher-deductible plans. This tends to reduce medical spending by making individuals more conscious of the cost of care and avoiding unnecessary treatment. He's talking about bringing down both deductibles and costs at the same time.
So, to sum up, Trump wants to get rid of high-deductible plans and improve coverage, yet still bring down rates, yet still make healthcare private, while repealing Obamacare, and covering a small group of people, or everybody, through government spending, or through the private sector, by using Canada as a model — but he's going to take those damn lines out of play. Makes perfect sense.