Quotulatiousness

May 21, 2014

“The VA really is a good example of a single-payer, socialized health system”

Filed under: Bureaucracy, Government, Health, USA — Tags: , , , — Nicholas Russon @ 07:22

J.D. Tuccille on the Veterans Health Administration:

Just a couple of years ago, Paul Krugman pointed to the Veterans Health Administration (VHA) as a “huge policy success story, which offers important lessons for future health reform.” He gloated, “yes, this is ‘socialized medicine.'”

Similarly, a letter touted by Physicians for a National Health Program trumpeted “the success of 22 wealthy countries and our own Department of Veterans Affairs, which use single-payer systems to provide better care for more people at far less cost.”

How could a bloated government bureaucracy achieve such low-cost success? As we found out recently, it’s by quietly sticking veterans on a waiting list and putting off their treatment for months — sometimes until the patients are far too dead to need much in the way of expensive care. Which is to say, calling it a “success” is stretching the meaning of the word beyond recognition.

And, while the White House insists it learned from press reports about the secret waiting lists, Press Secretary Jay Carney acknowledges that the administration long knew about “the backlog and disability claims” that have accumulated in the VHA.

This should surprise nobody. Canada’s government-run single-payer health system has long suffered waiting times for care. The country’s Fraser Institute estimates [PDF] “the national median waiting time from specialist appointment to treatment increased from 9.3 weeks in 2010 to 9.5 weeks in 2011.”

Likewise, once famously social democratic Sweden has seen a rise in private health coverage in parallel to the state system because of long delays to receive care. “It’s quicker to get a colleague back to work if you have an operation in two weeks’ time rather than having to wait for a year,” privately insured Anna Norlander told Sveriges Radio.

[...]

So the VA really is a good example of a single-payer, socialized health system. Just not in the way that fans of that approach mean.

April 14, 2014

In defence of limited corporate liability

Filed under: Business, Law, Liberty, USA — Tags: , , — Nicholas Russon @ 10:47

The RSS feed that used to track Megan McArdle’s posts at Bloomberg View has been on the fritz for a couple of weeks, so I missed this article when it was posted earlier this month:

The argument for unlimited liability isn’t just a libertarian evergreen; it’s also something you occasionally hear from the far left, because it would basically make the corporate form untenable. Imagine, if you would, that by buying and holding the share of a firm for 10 minutes, you thereby subjected yourself to seizure of all your goods to satisfy potential lawsuit judgments — even if those judgments involved behavior that involved no legal liability at the time of the acts.

Not possible? That’s basically what happened with asbestos liability. Firms that had had no legal liability under the doctrines of the times in which the asbestos was sold or used suddenly found themselves driven into bankruptcy by massive settlements. Moreover, after the first wave of lawsuits exhausted the funds available to pay asbestos claims, plaintiffs’ lawyers started pushing to expand the number of pockets that could be dipped into.

A company that had never manufactured asbestos could be sued and have to spend hundreds of millions of dollars on lawsuits and settlements because it had once bought a company with an insulation division that had formerly manufactured asbestos — even though it had immediately sold off that division in the process of completing the merger. Insurers could be forced to pay out for the whole of a company’s liability if they had sold a company insurance for even a year between the time a company started making or using asbestos and the time that the plaintiff discovered the harm. And “harm” wasn’t limited to getting sick; you could sue for the emotional distress of worrying that you might get sick.

Kind of hard to imagine becoming a shareholder under those circumstances, isn’t it? Maybe you’d better put your money in the bank — a small, privately held bank, of course. Commerce would look something like it did in medieval Italy, where all economic activity was basically organized by the family or the partnership.

Growth would have to be financed by debt or by retained earnings. That’s how British firms financed expansion in the early days of the Industrial Revolution. It’s how small businesses tend to finance expansion now.

The traditional libertarian answer is “insurance”, but that’s a non-starter as well.

To which I answer: What insurance company?

Insurers are also corporations, and their owners get the same valuable shield from liability that everyone else gets from the corporate form. They may have shareholders, or they may be mutually held by their policy holders, but either way, someone is getting protection from lawsuit by the same laws that protect General Motors Co. This sort of liability shield is vital for any large aggregation of capital requiring lots of contributors — which is basically the definition of an insurance company.

April 6, 2014

Obamacare, viewed from a distance

Filed under: Government, Health, Politics, USA — Tags: , , , — Nicholas Russon @ 09:16

Peggy Noonan attempts to look at Obamacare apart from the daily battles over details:

As I say, put aside the argument, step back and view the thing at a distance. Support it or not, you cannot look at ObamaCare and call it anything but a huge, historic mess. It is also utterly unique in the annals of American lawmaking and government administration.

Its biggest proponent in Congress, the Democratic speaker of the House, literally said — blithely, mindlessly, but in a way forthcomingly — that we have to pass the bill to find out what’s in it. It is a cliché to note this. But really, Nancy Pelosi’s statement was a historic admission that she was fighting hard for something she herself didn’t understand, but she had every confidence regulators and bureaucratic interpreters would tell her in time what she’d done. This is how we make laws now.

Her comments alarmed congressional Republicans but inspired Democrats, who for the next three years would carry on like blithering idiots making believe they’d read the bill and understood its implications. They were later taken aback by complaints from their constituents. The White House, on the other hand, seems to have understood what the bill would do, and lied in a way so specific it showed they knew exactly what to spin and how. “If you like your health-care plan, you can keep your health-care plan, period.” “If you like your doctor, you can keep your doctor, period.” That of course was the president, misrepresenting the facts of his signature legislative effort. That was historic, too. If you liked your doctor, your plan, your network, your coverage, your deductible you could not keep it. Your existing policy had to pass muster with the administration, which would fight to the death to ensure that 60-year-old women have pediatric dental coverage.

[...]

The program is unique in that the bill that was signed four years ago, on March 23, 2010, is not the law, or rather program, that now exists. Parts of it have been changed or delayed 30 times. It is telling that the president rebuffed Congress when it asked to work with him on alterations, but had no qualms about doing them by executive fiat. The program today, which affects a sixth of the U.S. economy, is not what was passed by the U.S. Congress. On Wednesday Robert Gibbs, who helped elect the president in 2008 and served as his first press secretary, predicted more changes to come. He told a business group in Colorado that the employer mandate would likely be scrapped entirely. He added that the program needed an “additional layer” or “cheaper” coverage and admitted he wasn’t sure the individual mandate had been the right way to go.

Finally, the program’s supporters have gone on quite a rhetorical journey, from “This is an excellent bill, and opponents hate the needy” to “People will love it once they have it” to “We may need some changes” to “I’ve co-sponsored a bill to make needed alternations” to “This will be seen by posterity as an advance in human freedom.”

February 5, 2014

NYT – reducing full-time employment by 2.5 million is a good thing

Filed under: Business, Economics, USA — Tags: , , — Nicholas Russon @ 09:33

This New York Times editorial tries valiantly to make the case that the recent prediction by the Congressional Budget Office of 2.5 million full-time job losses is a good thing for the affected workers and the economy as a whole:

The Congressional Budget Office estimated on Tuesday that the Affordable Care Act will reduce the number of full-time workers by 2.5 million over the next decade. That is mostly a good thing, a liberating result of the law. Of course, Republicans immediately tried to brand the findings as “devastating” and stark evidence of President Obama’s health care reform as a failure and a job killer. It is no such thing.

The report estimated that — thanks to an increase in insurance coverage under the act and the availability of subsidies to help pay the premiums — many workers who felt obliged to stay in a job that provided health benefits would now be able to leave those jobs or choose to work fewer hours than they otherwise would have. In other words, the report is about the choices workers can make when they are no longer tethered to an employer because of health benefits. The cumulative effect on the labor supply is the equivalent of 2.5 million fewer full-time workers by 2024.

[...]

The new law will free people, young and old, to pursue careers or retirement without having to worry about health coverage. Workers can seek positions they are most qualified for and will no longer need to feel locked into a job they don’t like because they need insurance for themselves or their families. It is hard to view this as any kind of disaster.

Despite all the whistling as we stroll along the cemetery fence, the editorial does correctly point out that insurance benefits that are tied to particular employers do limit choices for many workers. I’ve made the argument a few times that this is something that unions should be pushing very hard for: to make benefits more portable for both unionized and non-unionized workers. The rest of the editorial isn’t quite as helpful … two and a half million current workers no longer working (and not through a voluntary switch to self-employment or retirement) isn’t the wonderful thing they claim it is. Those people and their families will still need income to provide themselves with food, shelter, and all the other necessities of modern life. Tough to do that without visible means of support.

Update: At the National Journal, James Oliphant rallies to the White House’s defence during what he calls “the worst day that Obamacare has had in weeks — and that’s saying something.”

To debate that point, the White House supplied as its first responder Jason Furman, the chairman of the Council of Economic Advisers, an academic and policymaker schooled in the intricacies of the labor market. Furman disputed any reading of the report that said the ACA was a net drag on the economy — but often doing so in head-scratching language of a Washington insider.

At one point, a reporter at Tuesday’s briefing asked Furman in frustration, “What the heck do you mean?”

Furman’s presence, however, outlined in neon the problem the Obama administration has been having since the ACA became law: a persistent inability to detail its benefits in language that resonates with the public. And in its defense, the ACA’s multiple mechanisms are not the easiest to explain. To that end, its critics, who often have relied upon hyperbole and scare tactics, have always held the political advantage.

But sometimes you just have to punch the bully in the nose — and Furman wasn’t the person for the job. That was the case Tuesday. The first takeaway from a complex CBO report was that the office had concluded that Obamacare is going to be a job-killer. Period. Full stop. It fell upon Furman — along with liberal bloggers — to attempt to explain that, no, it’s more complicated than that.

Follow along: The report doesn’t say that the ACA will result in 2 million jobs lost by 2017, but projects there will be 2 million fewer workers in the workforce, the White House says (a number it doesn’t necessarily agree with). It’s the difference, Furman underscored, between labor supply and labor demand. And they aren’t “jobs,” he reiterated, they are “FTEs.” (Full-time equivalents, if you are scoring at home.)

In other words, he explained, businesses will still want as many workers as ever, but the ACA will result in an increasing number of workers deciding to take themselves either entirely out of the job market or working fewer hours. Why? Because they may decide to keep their income below a certain level in order to qualify for government help to buy health insurance on the exchanges.

This is a good thing, Furman said, because the ACA will give workers more flexibility, whether they want to become entrepreneurs or take another, lower-paying job. And again, the press corps had some trouble with this concept. It’s good for someone to take a lower-paying job? And it’s good that the law encourages them to take it?

January 19, 2014

Obamacare opponents ruthlessly parody the efforts of supporters

Filed under: Humour, Media, Politics — Tags: , , , , — Nicholas Russon @ 10:51

Those who are still opposed to President Obama’s healthcare program will go to any lengths to ridicule and belittle both the program itself and the people who support it. Here, for example is one of the nastiest attempts to drag Obamacare into the public eye in as negative and mocking a fashion as possible.

I’m either on drugs, or the administration is this helplessly stupid. The Tell a Friend — Get Covered campaign, better described as “a tourist trap off Route 66,” began a six-hour live-streamed event Thursday afternoon that was advertised to “include stories, tips, helpful information and other details related to national health care options.” Really, it was as if the audio-visual club got wasted on malt liquor and hijacked public access television.

Get Covered, a partnership among state healthcare exchanges and the Obamacare missionary Enroll America, expertly fails to cater to young people. Its circus began Thursday with a dance-off between Richard Simmons and the contortionist Nathan Barnatt, overseen by the star of an Internet show whose premise is “drunk cooking.” How this is supposed to entice a 27 year old to pay $200 a month for health insurance, or even talk about it, is a question for the gods.

“What’s he doing?” Simmons exclaimed as Barnatt began to shake his body wildly.

“He’s extending his livelihood! That’s what he’s doing!” Hannah Hart, your host and creator of My Drunk Kitchen, responded in an endorsement of cardio.

Oh, c’mon. Is this seriously going to be one of those D-grade infomercials in which the participants force every line back to the bottom one?

“His moves are telling us something,” Barnatt whispered as Simmons took his turn.

“They are, and I think they’re saying, ‘Be flexible about your health insurance options,’” Hart responded.

Yes. Yes, it is.

Oh. Sorry. Apparently this isn’t a sleazy disinformation scheme by opponents. It’s a “good faith” advertising effort by supporters. Carry on, then.

January 5, 2014

Polarized America, not

Filed under: Government, Media, USA — Tags: , , , , — Nicholas Russon @ 10:50

In Time, Nick Gillespie goes through the polling numbers and finds that despite frequent claims that the United States is more polarized than ever before, it’s certainly not over the issues you’d expect:

The apparently massive and unbridgeable gulfs between Republicans and Democrats, men and women, gays and straights, secularists and believers, rich and poor, and coastal elites and heartland Americans are belied by data that substantial and growing majorities of folks actually agree on a wide variety of important social and policy issues and attitudes.

Here’s a sampling:

  • Pot legalization. As Colorado and Washington state begin selling legal weed, fully 58 percent of Americans believe the drug should be legal. That’s up from just 12 percent in 1969, says Gallup.
  • Abortion. Few issues are as hotly contested and few issues have generated such consistent support, with 78 percent of us thinking abortion should be legal under either all or some circumstances, and just 20 percent thinking it should be illegal in all circumstances. Those numbers basically haven’t changed since 1975.
  • Homosexuality. In 2001, just 40 percent of Americans thought that that “gay or lesbian relations” were morally acceptable. Last year, 59 percent had no problem with them. And 53 percent now think same-sex marriage should be given equal status to conventional couplings. That’s up almost 20 points from the start of the century.
  • Health Insurance. As Obamacare cranks up, 56 percent believe that it is not “the responsibility of the federal goverment to make sure all Americans have healthcare coverage.” That’s up from 28 percent in 2006. Only 42 percent — down from 69 percent in 2006 — think providing health insurance is the government’s responsibility.
  • Trust in Government. Just 19 percent of Americans “trust the government in Washington to do what’s right” all or most of the time. That’s down from 60 percent in 2002. Meanwhile, 81 percent of us don’t expect the government to do what’s right all or most of the time, up more than 40 points in the last decade. And a record-high 72 percent believe government “will be the biggest threat to the country in the future.” During the Obama presidency, 55 percent say that the government “is doing too much.”

Of course, all of these issues — and many others — contain nuances and contexts that need to be taken into account. And most issues show partisan differences too, with Republicans pulling in one direction, Democrats in another, and Independents (who are, at 44 percent, the single-largest bloc of voters by far) somewhere in between. But it’s striking that Americans seem to be becoming more socially liberal and fiscally conservative with every passing year. That just isn’t reflected in the platforms of the major parties, with the GOP only getting more conservative and the Democrats only more liberal.

December 21, 2013

I’m starting to think that Megan McArdle is a bit jaundiced about Obamacare

Filed under: Government, Health, USA — Tags: , , — Nicholas Russon @ 11:27

Otherwise, how can you account for running a column titled like this?

Obamacare Initiates Self-Destruction Sequence

On Wednesday, Politico’s Carrie Budoff Brown reported that the administration was saying fewer than 500,000 people had actually lost insurance due to Obamacare-induced cancellations. This struck me as a strange leak: Half a million is a lot less than many people (including me) have been estimating, but it is still not a small number, and the administration has tended to sit on negative information until the last possible moment.

Yesterday, we had a more official announcement from the administration: Anyone who has had their policies cancelled will be exempt from the individual mandate next year. The administration is also allowing those people to buy catastrophic plans, even if they’re over 30.

What to make of these two statements? On the one hand, the administration is trying to minimize the number of people who have been affected by cancellations, and on the other hand, it is unveiling a fix to the problem of cancellations. And these are not minor changes.

[...]

The White House is focused on winning the news cycle, day by day, not the kind of detached technocratic policymaking that they, and the law’s other supporters, hoped this law would embody. Does your fix create problems later, cause costs to spiral or people to drop out of the insurance market, or lead to political pressure to expand the fixes in ways that critically undermine the law? Well, that’s preferable to sudden death right now.

However incoherent these fixes may seem, they send two messages, loud and clear. The first is that although liberal pundits may think that the law is a done deal, impossible to repeal, the administration does not believe that. The willingness to take large risks with the program’s stability indicates that the administration thinks it has a huge amount to lose — that the White House is in a battle for the program’s very existence, not a few marginal House and Senate seats.

And the second is that enrollment probably isn’t what the administration was hoping. I don’t know that we’ll start Jan. 1 with fewer people insured than we had a year ago, but this certainly shouldn’t make us optimistic. It’s not like people who lost their insurance due to Obamacare, and now can’t afford to replace their policy, are going to be happy that they’re exempted from the mandate; they’re still going to be pretty mad. This is at best, damage control. Which suggests that the administration is expecting a fair amount of damage.

December 4, 2013

Prescription contraceptives

Filed under: Business, Law, Religion, USA — Tags: , , , , — Nicholas Russon @ 09:31

Shikha Dalmia argues that the fight over forcing companies to cover contraceptive prescriptions is based on a mistaken view of women’s rights:

The administration argues that acquiescing to such arguments would mean allowing bosses or corporate CEOs to restrict women’s choices to promote their own religious beliefs. “Our policy is designed to ensure that health care decisions are made between a woman and her doctor,” noted White House spokesman Jay Carney. But it’s not bosses who pose the bigger barrier to birth control but doctors themselves.

The only reason American women need insurance coverage for contraception is because they can’t buy birth control pills without a prescription — which doctors won’t hand them without an annual exam. Few dispute anymore — not even the American College of Obstetricians and Gynecologists — that the pills are perfectly safe requiring neither a medical diagnosis nor supervision. They have side effects like every other medicine but none so serious that can’t be effectively communicated through the usual warning labels. Requiring a medical exam assumes that women can’t be completely trusted with their own health. But such paternalism is counterproductive: Most women who stop taking pills don’t do so because they can’t afford them without insurance. (A one-month generic supply from Costco costs $25.) They do so because they can’t always make the time for a doctor’s visit when their prescription runs out. This problem is especially acute for working women — professional or others.

The birth control issue shouldn’t be cast in terms women’s rights versus religious rights. That’ll turn it into a lose-lose proposition. Medical paternalism is a far bigger threat to women’s reproductive choices than religious zealotry. Focusing on the first will do more to give women control over their bodies — including the female employees of Hobby Lobby — than a pitched battle against the second.

November 28, 2013

Colby Cosh on Obamacare’s international ripples

Filed under: Cancon, Government, Health, USA — Tags: , , — Nicholas Russon @ 11:12

You’ll have guessed from the tone of my Obamacare links and comments that I didn’t think it was a good idea from the start and it’s been a great example of how not to implement a major government initiative. That said, it’s a sure bet that Obamacare will have influence on other countries as they consider their own health programs. Colby Cosh is surprised that the scandal-addled Canadian media hasn’t been paying more attention to the Obamacare train wreck as the wheels fall off in all directions:

Obamacare isn’t going to make major systemic change in either direction look more appetizing to Canadians. That’s an important Canadian angle right there. Not long ago it looked as though national pharmacare was likely to become an election issue here, quarterbacked by the NDP and perhaps the Liberals, too. The concept has plenty of support among economists and other health policy experts—the same class of kindly boffins that, in the U.S., lined up almost unanimously behind the Affordable Care Act.

For better or worse, nationalizing prescription-drug insurance seems likely to be a much tougher sell here in the immediate future. Any large, complex health care experiment will be. The more wise heads support it, the easier it will be for supporters of the status quo to shout, “Unintended consequences! Ivory-tower tomfoolery!” Indeed, political strategists may already be saying it to themselves.

American commentators are already starting to wonder if Obamacare’s difficult start and increasingly troubled prospects may end up as a victory for small-government conservatism. The problems for the program do not end with the calamitous state of the federal insurance-exchange website, or even with the nasty surprises handed to the self-employed and freelancers in the “individual market” who were falsely promised: “If you like your plan you can keep your plan.” Some Obamacare buyers are finding themselves shut out from their preferred doctors and hospitals; employers are junking non-compliant health plans; and many in the middle class who liked the Obamacare concept are facing sticker shock.

[...]

The redistributive aspects of Obamacare were undersold, and possible pitfalls obviously not foreseen. The neoliberal Democrat Walter Russell Mead put it neatly the other day: “President Obama may be the Democrat who ends up convincing millions of American millennials that Ronald Reagan was right, and that the progressive administrative state is neither honest nor competent enough to solve the problems of the American people.” If that is the case, the effects cannot be confined to the U.S.

November 24, 2013

A life reconstructed

Filed under: Health, Science — Tags: , , , — Nicholas Russon @ 12:28

In the New York Times, Mary Lou Jepson talks about the near-total loss and recovery of her life:

In my early 30s, for a few months, I altered my body chemistry and hormones so that I was closer to a man in his early 20s. I was blown away by how dramatically my thoughts changed. I was angry almost all the time, thought about sex constantly, and assumed I was the smartest person in the entire world. Over the years I had met guys rather like this.

I was not experimenting with hormone levels out of idle curiosity or in some kind of quirky science experiment. I was on hormone treatments because I’d had a tumor removed along with part of my pituitary gland, which makes key hormones the body needs to function.

[...]

In my experience it can be difficult to find a doctor to help a patient do this. I believe it is only partly because of the shortage of endocrinologists, doctors who specialize in the hormonal systems. Some doctors seemed not to believe that every hormone mattered. How many other patients like me have failed to find their ideal balance of medications?

There is evidence that careful tuning of these hormones can lead to dramatic personal and professional outcomes. Doctors and patients should consider replacement of every known hormone that is missing. New neurochemicals are identified by researchers every few years and should be studied as possible additions to the mix.

And access to these medications should not be hindered. As it stands today, some of the hormones I need daily to stay alive and to thrive can be, and frequently have been, blocked at the whim or neglect of a doctor’s office, insurance company or pharmacy. And still, 18 years after my surgery and despite great advances in endocrinal science, I need to fight to get them.

Disputes between organizations on whether prescriptions, test results or proper forms were transmitted or not. Communication breakdowns. A Kafka-esque nightmare of constantly needing another approval. It can take weeks to be notified of a rejection.

H/T to Tim O’Reilly for the link:

November 16, 2013

US apparently trying out new quasi-monarchical form of government

Filed under: Government, Wine — Tags: , , , , — Nicholas Russon @ 10:18

As a British-born Canadian I’m used to the occasional ill-informed jab from American commentators about our form of government being a barbaric remnant of the dark ages, what with still having a monarch and all. If I respond at all, it’s usually to point out that we owe a lot for the longevity of our slowly evolving political system to the “Baronial brute squad of 1215” and the fact that we’ve (for the most part) steadily moved the monarch away from the levers of power. 798 years of political evolution is not to be sneered at. In the United States, the evolution has apparently gone in the other direction: moving those levers of power toward the monarch and away from the soi-disant “legislative branch” of government.

I haven’t seen as much fun-poking about the monarchy from my American friends lately, as they seem to have introduced a new form of non-crown-wearing, non-ermine-trimmed monarchy:

It is a condition of my admission to this great land that I am not allowed to foment the overthrow of the United States government. Oh, I signed it airily enough, but you’d be surprised, as the years go by, how often the urge to foment starts to rise in one’s gullet. Fortunately, at least as far as constitutional government goes, the president of the United States is doing a grand job of overthrowing it all by himself.

On Thursday, he passed a new law at a press conference. George III never did that. But, having ordered America’s insurance companies to comply with Obamacare, the president announced that he is now ordering them not to comply with Obamacare. The legislative branch (as it’s still quaintly known) passed a law purporting to grandfather your existing health plan. The regulatory bureaucracy then interpreted the law so as to un-grandfather your health plan. So His Most Excellent Majesty has commanded that your health plan be de-un-grandfathered. That seems likely to work. The insurance industry had three years to prepare for the introduction of Obamacare. Now the King has given them six weeks to de-introduce Obamacare.

“I wonder if he has the legal authority to do this,” mused former Vermont governor Howard Dean. But he’s obviously some kind of right-wing wacko. Later that day, anxious to help him out, Congress offered to “pass” a “law” allowing people to keep their health plans. The same president who had unilaterally commanded that people be allowed to keep their health plans indignantly threatened to veto any such law to that effect: It only counts if he does it — geddit? As his court eunuchs at the Associated Press obligingly put it: “Obama Will Allow Old Plans.” It’s Barry’s world; we just live in it.

The reason for the benign Sovereign’s exercise of the Royal Prerogative is that millions of his subjects — or “folks,” as he prefers to call us, no fewer than 27 times during his press conference — have had their lives upended by Obamacare. Your traditional hard-core statist, surveying the mountain of human wreckage he has wrought, usually says, “Well, you can’t make an omelet without breaking a few eggs.” But Obama is the first to order that his omelet be unscrambled and the eggs put back in their original shells. Is this even doable? No. That’s the point. When it doesn’t work, he’ll be able to give another press conference blaming the insurance companies, or the state commissioners, or George W. Bush . . .

November 15, 2013

Misunderstanding the purpose of health insurance

Filed under: Business, Economics, Health — Tags: , , , , — Nicholas Russon @ 00:01

One of the big problems facing everyone in the US is the cost of healthcare: it’s expensive and getting more so. Obamacare is supposed to be an attempt to lower the overall cost of healthcare, but by approaching it from the “insurance” angle, it’s likely to make the situation worse rather than better. The Anti-Gnostic reposted an extended comment from Steve Sailer’s blog explaining why misunderstanding the purpose of insurance is a big problem:

1) Most people lose money on insurance, because most of the time insurance doesn’t pay out more than it takes in.

2) Thus, a “good” policy is a catastrophic-coverage-only, high-deductible policy, where most payments are out of pocket. This is a policy that protects you against the downside risk, but where you lose a lot less on average.

3) This is because the purpose of insurance is to protect yourself from *catastrophe*, not to make routine purchases.

4) For example, if you went to Best Buy and whipped out your home insurance card to get a new flat screen TV, everyone would look at you as a crazy man. “Don’t you know that home insurance is only for fires and floods, and not for routine purchases?”

5) And so it should be with health insurance, because you’ll actually — *provably* — pay less with a high deductible plan for all but catastrophic conditions.

6) Indeed, the most innovative and technologically advanced areas of medicine are ambulatory areas in which people feel that markets are “ok”. These are paradoxically the most trivial areas: lasik, plastic surgery, dermatology, dentistry, even veterinary medicine.

7) Why are these areas so advanced? Because people pay cash money, because they choose based on quality, and because they are *able* to choose — i.e. they aren’t being wheeled up to the hospital in a gurney in a no choice scenario.

8) Moreover, with every technology ever, from cars to cell phones to air travel to computers, things that start out expensive become cheaper when enough people demand them. With medicine it seems to bite more that money means differences in care. But at the end of the day doctors, patients, nurses, drugs, ambulances…all that stuff means real resources, and a refusal to do explicit computations just results in massive waste as costs are shunted to a place where no one looks at them.

At the Independent Institute blog, John Graham points out that — in the few places that government allows free markets to operate — prices tend to drop over time even while services or features improve:

It has taken a long time, but the price of hearing aids is in the process of falling dramatically. How has this happened? Technological innovation, of course, but there is more. There’s no shortage of technological innovation in U.S. health care. However, because third-party payers, that is, health insurers and governments, determine prices, there is no mechanism for customers to signal value to providers.

This is not the case for hearing aids: Although some states have mandated insurance coverage for hearing aids, this is usually limited to disabled children. The big market for hearing aids is seniors, and Medicare does not cover hearing aids.

This is another case of a phenomenon observed elsewhere by Devon Herrick of the National Center for Policy Analysis [PDF]: Where patients pay directly for medical care, prices fall like they do in every other market.

Seniors who want highly personalized service from an audiologist in his own practice can get it, and they will pay for it. Those who want to order online can save money by doing that. Those who want to get their old hearing aids repaired can make that choice. And the most adventurous seniors, who don’t mind running an earpiece into an iPhone, can get a functional hearing aid almost for free.

We are on the verge of enjoying universal access to hearing aids — but only because the government restrained itself from interfering, and let the market operate.

November 9, 2013

Barack Obama on the difference between private enterprise and government

Filed under: Bureaucracy, Business, Government, Technology, USA — Tags: , , , — Nicholas Russon @ 11:43

Ann Althouse finds it amazing that President Obama clearly understands why his campaign website was so effective and why the Obamacare website fails on so many levels, but can’t generalize that knowledge to the whole public/private sphere:

In yesterday’s interview with Chuck Todd, Obama said:

    You know, one of the lessons — learned from this whole process on the website — is that probably the biggest gap between the private sector and the federal government is when it comes to I.T. …

    Well, the reason is is that when it comes to my campaign, I’m not constrained by a bunch of federal procurement rules, right?

That is, many have pointed out that his campaign website was really good, so why didn’t that mean that he’d be good at setting up a health insurance website? The answer is that the government is bad because the government is hampered by… government!

    And how we write — specifications and — and how the — the whole things gets built out. So part of what I’m gonna be looking at is how do we across the board, across the federal government, leap into the 21st century.

I love the combination of: 1. Barely able to articulate what the hell happens inside these computer systems, and 2. Wanting to leap!

    Because when it comes to medical records for veterans, it’s still done in paper. Medicaid is still largely done on paper.

    When we buy I.T. services generally, it is so bureaucratic and so cumbersome that a whole bunch of it doesn’t work or it ends up being way over cost.

This should have made him sympathetic to the way government burdens private enterprise, but he’s focused on liberating government to take over more of what has been done privately. And yet there’s no plan, no idea about what would suddenly enable government to displace private businesses competing to offer a product people want to buy.

November 1, 2013

The Obamacare moment of clarity

Filed under: Government, Health, USA — Tags: , , , — Nicholas Russon @ 07:49

In the Washington Post, Charles Krauthammer on the moment of understanding:

Every disaster has its moment of clarity. Physicist Richard Feynman dunks an O-ring into ice water and everyone understands instantly why the shuttle Challenger exploded. This week, the Obamacare O-ring froze for all the world to see: Hundreds of thousands of cancellation letters went out to people who had been assured a dozen times by the president that “If you like your health-care plan, you’ll be able to keep your health-care plan. Period.”

The cancellations lay bare three pillars of Obamacare: (a) mendacity, (b) paternalism and (c) subterfuge.

(a) Those letters are irrefutable evidence that President Obama’s repeated you-keep-your-coverage claim was false. Why were they sent out? Because Obamacare renders illegal (with exceedingly narrow “grandfathered” exceptions) the continuation of any insurance plan deemed by Washington regulators not to meet their arbitrary standards for adequacy. Example: No maternity care? You are terminated.

So a law designed to cover the uninsured is now throwing far more people off their insurance than it can possibly be signing up on the nonfunctioning insurance exchanges. Indeed, most of the 19 million people with individual insurance will have to find new and likely more expensive coverage. And that doesn’t even include the additional millions who are sure to lose their employer-provided coverage. That’s a lot of people. That’s a pretty big lie.

October 29, 2013

Obamacare’s technical issues

Filed under: Government, Technology, USA — Tags: , , , — Nicholas Russon @ 07:48

A comment at Marginal Revolution deservedly has been promoted to being a guest post, discussing the scale of the problems with the Obamacare software:

The real problems are with the back end of the software. When you try to get a quote for health insurance, the system has to connect to computers at the IRS, the VA, Medicaid/CHIP, various state agencies, Treasury, and HHS. They also have to connect to all the health plan carriers to get pre-subsidy pricing. All of these queries receive data that is then fed into the online calculator to give you a price. If any of these queries fails, the whole transaction fails.

Most of these systems are old legacy systems with their own unique data formats. Some have been around since the 1960′s, and the people who wrote the code that runs on them are long gone. If one of these old crappy systems takes too long to respond, the transaction times out.

[...]

When you even contemplate bringing an old legacy system into a large-scale web project, you should do load testing on that system as part of the feasibility process before you ever write a line of production code, because if those old servers can’t handle the load, your whole project is dead in the water if you are forced to rely on them. There are no easy fixes for the fact that a 30 year old mainframe can not handle thousands of simultaneous queries. And upgrading all the back-end systems is a bigger job than the web site itself. Some of those systems are still there because attempts to upgrade them failed in the past. Too much legacy software, too many other co-reliant systems, etc. So if they aren’t going to handle the job, you need a completely different design for your public portal.

A lot of focus has been on the front-end code, because that’s the code that we can inspect, and it’s the code that lots of amateur web programmers are familiar with, so everyone’s got an opinion. And sure, it’s horribly written in many places. But in systems like this the problems that keep you up at night are almost always in the back-end integration.

The root problem was horrific management. The end result is a system built incorrectly and shipped without doing the kind of testing that sound engineering practices call for. These aren’t ‘mistakes’, they are the result of gross negligence, ignorance, and the violation of engineering best practices at just about every step of the way.

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