Takeaway: Newsom campaigns in Florida; CMS gets into dentistry & ignore massive global disruption's role in inflation at your peril.

Politics. Getting to peak stupid in American politics is a high bar to clear but California Governor Gavin Newsom is a contender.

Last week, his campaign for California Governor ran ads IN FLORIDA heralding the freedoms of California life and urging the people of the Sunshine state to move.

People who pay careful attention to state level politics know the gambit here. Newsom believes and is joined by many senior members of his party, that Joe Biden will not or cannot run for a second term. The California governor also believes he has a shot at the Democratic nomination. Lastly, there is a high probability, if nominated, Newsom’s opponent will be Florida Governor Ron DeSantis.

So, why not get the party started?

To people who do not pay careful attention to state level politics, Newsom looks ridiculous. “Why,” Floridians must wonder “does Gavin Newsom’s gubernatorial campaign want to educate us on freedom?”

Their wonderment is only increased by their understanding that Newsom’s pandemic policies, which may have begun as well-intended, devolved by the summer of 2020 into power trips for state and local officials. The freedom to enjoy Florida’s beaches, as one example, was unmatched in California.

As Nate Silver points out, “freedom” is not exactly on brand for Governor Newsom, which also tells you it must polling very well.

Policy. If you are over 65 and preparing for a liver transplant, CMS is happy to report you may be eligible for a teeth cleaning as part of your life saving/transforming operation. Additionally, CMS would like to know what other medical services should include dental work. Their suggestions? Cancer treatment and knee and hip replacements.

CMS released the proposed 2023 Physicians Fee Schedule proposed rule last week. In a bid to appease the progressive wing of the president’s party, those creative health care lawyers in Baltimore managed to find a way – albeit small and sort of absurd – to expand Medicare’s scope of benefits to include dental care.

Current law permits Medicare to pay for dental work when it is integral to other health services. For example, Maxillofacial surgery may require dental work. CMS is now proposing dental work is integral to an organ transplant and potentially a knee replacement which, for most people is a good two or three feet from their mouth.

That has CMS rewriting the skeleton song, the knee bone is not, apparently, connected to the thigh bone but rather, the jaw bone.

Power. It should go without saying that Newsom’s Florida strategy means pandemic policies – pharmaceutical and non-pharmaceutical – will share center stage with inflation in November and beyond.

You would have to be Federal Reserve Chairman, Jay Powell, not to recognize that the disruption caused by these public health policies contributed dramatically to the labor shortages and high wage demands driving so much of the inflationary trend.

Of course, printing a few trillion dollars and mailing it out so people could have history’s longest spring break are also factors.  Those things tend to wash through the system and resolve with time, provided Congress keeps the checkbook in the desk drawer.

What does not resolve easily are the effects of 43 million Americans changing zip codes in the year ending in February 2022. Yes, many of those moves were short distances – from New York City to Greenwich, CT for example. Even then, the coffee shop in midtown had fewer customers while the one on Greenwich Avenue had more and not enough baristas to serve them.

What also does not resolve easily is the sudden unreliability of global trade partners that found neat new ways to push their populations around and remind them who is boss. Many – certainly not all – goods must be produced closer to home giving the barista more, often better paying options.

The talk in November and throughout 2023 will be about printing money, paying people not to work and so forth. People who lived through Governor Newsom’s beach closures or Mayor Eric Adams’ vaccine mandates or happen to have a passing relationship with world history know better. Their feelings, like inflation, are not resolved easily.

Have a great rest of the weekend.

Emily Evans
Managing Director – Health Policy


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