Legal Commentary

Gruber's (And the Obama Administration's) Disclosure Problem

By Big Tent Democrat

I am sympathetic, for my own personal reasons, to people charged with not disclosing conflicts of interest. For the most part, I doubt that people say things they do not really think because someone gave them a check. I think they generally get the check because of WHAT they think. I think that is the case with MIT Professor Jonathan Gruber, now embroiled in a brouhaha over his failure to disclose his government contract with the Obama Administration.

To be clear, it is my view that Gruber surely should have disclosed his government contract and the Obama Administration should never have referred to him as an "independent" voice. That said, the more intriguing question for me is what did the Obama Administration's contracting of Gruber mean about its views on health care reform? R.J. Eskew writes:

Why do President Obama and his advisors keep touting the tax? And why do journalists like David Leonhardt of the New York Times keep asserting that "health economists" think it's a good idea? Uwe Reinhardt - the most respected health economist in the country - said the idea that "with high cost-sharing, patients will do the only legitimate ... cost-benefit calculus ... surely is nonsense." The best-known advocate for the tax is MIT economist Jonathan Gruber, who was hyping it as recently as a week ago, without mentioning new and contradictory data.

The Post described Gruber in 2007 as "possibly the party's most influential health-care expert and a voice of realism in its internal debates." How can a "voice of realism" claim that this is "a tax that's not a tax," one that affects "generous" plans? That statement was published only nineteen days after a paper in the influential journal Health Affairs (summarized here) disproved it. Using actual benefits data, the authors showed the tax would not target "generous" plans. Instead it would unfairly affect plans whose enrollees were older, worked in the wrong industry, or lived in an area where treatment costs are high. A leading actuary came to a similar conclusion.

Gruber also claimed that the money employers save (by slashing benefits to avoid the tax) would be returned to workers as wages or other compensation. But two leading health benefits firms (2) had already published surveys in which the vast majority of employers polled insisted they would do no such thing.

These are intelligent, ethical, dedicated people. So what's going on? I suspect the problem is an inability to reject an attractive idea, even when confronted with contradictory facts. There is a simple truth in the world of ideas: Theories can be beautiful. Reality can be ugly.

(Emphasis supplied.) I think Eskew is right but incomplete. At this point, the Obama administration and its advocates, like Jonathan Gruber and Ezra Klein, know that the Senate bill is probably the only path for passage of a bill. It behooves them now to ignore the problems with the bill and to tout it as best they can. Of course therein lies the problem with selling Gruber as an "independent" voice on the issue. He is not an independent voice.

I oppose the excise tax in the Senate bill. I think it is bad policy and certainly bad politics. But maybe it can be fixed somewhat. John Kerry wrote:

Does the Senate-passed bill cast too broad a net by setting the excise tax threshold too low? Yes. This could affect some of the hardest working American families. So let's fix it, not nix it. I believe the final health care reform bill will include appropriate adjustments to preserve its cost containing benefits while increasing the fairness of this provision. But let's get back to the business of doing that instead of fighting to kill a provision that improves health care -- and improves the chances of passing health care this month.

Fine. Get to work Senator Kerry.

Speaking for me only

Full post as published by TalkLeft on January 08, 2010 (boomark / email).