Part 3: My projections for health care reform

Part 3: My projections for health care reform

This is the third of three posts on how the Massachusetts special election interacts with health care reform:


After a lot of feedback and hard thinking, I conclude that this is extremely difficult to predict. Here are the subjective judgments I’m making:

  • I assume the Massachusetts race is a toss-up.
  • I assume there is a difference in the impact on health care legislation of a slim Coakley win and a big Coakley win. I am setting the breakpoint at +5.
  • I assume a 98/2 chance of legislative success (signed law) if Coakley wins big, and a 90/10 chance if she wins by a slim margin.
  • If Brown wins:
    • I’ve got collapse at 45%.
    • I assume reconciliation and a deal with Senator Snowe are super-long shots. Reconciliation is hard and extremely unsatisfying to the bill’s advocates, and a deal with Snowe is probably too far gone.
    • That leaves “ram it through” and “House folds.” I keep bouncing between 2:1 in each direction. So I ended up saying equal chances for each.

Before Tuesday’s election, I predict a 75% chance that there will be a health care lawIf Brown wins, I predict a 55% chance of a law and a 45% chance that legislation implodes, with the most likely scenarios being ram it through the Senate before Brown is seated, and the House folding and passing the Senate bill.


Build your own health care legislation decision tree

If you care a lot about this and think my subjective judgments are crazy, then I will help you build your own decision tree. This is called Bayesian analysis. It sounds difficult but it’s not. I will walk you through it, step by step.

You can click on any diagram for a larger view.

Step 1: What is your projection for the Massachusetts Senate race? You can use polling data, expert analysis, or look at what the market is predicting. I played it safe and called the race a toss-up.

Step 2: I think there’s a difference in the legislative impact of a big Coakley win and a narrow Coakley win. I set the breakpoint at +5. Choose your own breakpoint and set probabilities. Assuming Ms. Coakley wins, what is the chance of a big win vs. a narrow win? I have no idea, so I again chose a 50/50 split.

Step 3: Assume Ms. Coakley wins big. What is the chance of a signed law? Everyone seems to think it’s quite high, but is that 90%, 95%, 98%, 100%? I’m guessing 98/2.

Step 4: Assume Ms. Coakley wins a narrow victory. What is the chance of a signed law? It’s lower than under a narrow victory, but how much lower? Leader Reid still has 60 votes, but do nervous Democratic Members bolt because they’re scared of losing reelection? I think a narrow Coakley victory has a fairly big effect, so I drop 98/2 to 90/10.

Step 5: This is the hard one. Assume a Brown victory. What path do the Democratic leaders choose, and how likely is collapse? You can review my analysis and the procedural options. The probabilities you assign to these five branches must add up to 100%. Here are my predictions.

Step 6: Put them all together. Multiply the probabilities as you move down each branch of the tree and write the results at the end of each branch. As an example, the “Ram it through” leg on my chart has a 50% X 25% = 12.5% chance of resulting in a law. The “Coakley narrow margin and Democrats bolt” scenario has a 50% X 50% X 10% = 2.5% chance of resulting in no law.

Color results that end in a law in green, and those that do not in red. The result probabilities should add up to 100%. (Click the diagram for a larger view.)

Step 7: Calculate your pre-election probability of a law by adding up all the green results, and your pre-election probability of no law by adding up the red results. Here are my results:

  • Law = 74.5%
  • No law = 25.5%

I rounded this to get my 75% pre-election prediction of a law.

Step 8: You already know your “Coakley big win” and “Coakley narrow win” probabilities from steps 3 & 4. Calculate your “Brown victory scenario” probabilities like this:

  • Law if Brown wins = Add the blue probabilities for the first four scenarios under the Brown wins branch.
  • No law if Brown wins = Take the “collapse” probability under the Brown wins branch.

My results if Brown wins are:

  • Law = 55%
  • No law = 45%

Ta da!

Thanks for playing.

14 responses

  1. Pingback: Tweets that mention Part 3: My projections for health care reform | KeithHennessey.com -- Topsy.com

  2. Keith,

    Don't you think it matters whether Brown wins big (more than 1 or 2 percent I'd say) or not? If its a really close race, his seating can be delayed for a lot longer than if it is a clear victory. So this may have an impact on the ability of Congress to ram through health care before he is seated.

  3. A Brown win by more than 5 points might lower "ram it through" odds and increase "Collapse" odds. I don't know if it's worth the effort given we are perhaps two days from result but I think there is a reasonable probability (say 20%) of a Brown 5 point or greater win which reduces the chances further of a new law.

  4. Since the election is tomorrow, and an acceptable 218+60 vote compromise has not been met, I would think the Ram it Through option would be impossible if Scott Brown wins. It would take 10 days to do the CBO scoring. If it takes another day for them to hash out a compromise, he is already seated by the time the CBO score comes in.

    Because of that, I score it 70/30 no bill if Scott Brown becomes Senator.

    Am I missing something?

    D

  5. I think a Brown win would insure that Health Care Deform (my spelling) is toast. His election demonstrates that nearly every incumbent Democrat Senator is in danger. Evan Bayh looked like a lock to be re-elected. Not now.

    Big $$$ will roll in for insurgent candidates while $$$ for Democrats dry up.

  6. Keith, thank you for explaining the measures being proposed to ensure passage of the current health care legislation. While your site is dedicated to pure analysis, I am amazed at how coolly we all discuss these convoluted and arcane options on other sites and venues, seemingly without giving a second thought to the ethics of the process. Here is a group of legislators, supposedly setting an example for the rest of us, touting the rule of law, preaching about ethics, who are willing to do anything, except take an honest vote, to pass a law they want, which most of the people they are elected to represent do not.

    Elements of congressional procedure that were intended as safeguards against coercion and unethical practices are being used for exactly the opposite purpose. The current legislative process utilizes bribery, coercive measures, secrecy, misrepresentation, and denial of both freedom of speech and due process, all under the guise of rules, rules that have been twisted beyond recognition. Since when has it been ethical to buy or coerce votes? When did bribery become defined as horse trading? When did persuasion take on the definition of “anything goes?” And why do we discuss the bill’s chances of passage without decrying the slimy practices being used to pass it? Where’s the outrage against this corruption of American values and the peoples’ right to be heard? Perhaps we’ll see it in the elections of 2010, as begun last year in NJ and VA. I continue to think so.

  7. Basically, KH says 50-50 odds. LOL, 50-50 means no idea what will happen, jump ball! Wasn't that a lot easier than this silly math exercise?? Too bad not more "hard thinking" in Bush WH – and the GOP would not be in such disarray!

    • What's weird is someone equating an analysis that results in a 50/50 estimate with a lack of "hard thinking." Hard thinking does not make the world black and white. Lack of thinking does that.

  8. I played with the tree a little.

    I changed the root node probabilities to 74.9% and 26.1% for a Brown and Coakley win respectively (the current normalized Intrade probabilities) and didn't change any other node. That moves the needle to 65.2 – 34.8 for the bill passing.

  9. If Brown wins, having the house pass the Senate bill is a viable but unlikely option. However if the Senate delays seating Brown in an obvious way, they risk a constitutional crises. Democrats would need to worry more about losing their heads than their seats.

  10. Pingback: The two bill strategy for health care legislation | KeithHennessey.com

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  12. Pingback: Fragile Consensus | Progressive Fix

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