Steel City Cowboy

Tuesday, January 26, 2010

Way way way too little, way way way too late

I'm all for a nice "spending freeze," but I'm think the President's proposal is sort of like Tiger Woods proposing to take the trash down the curb himself this weekend because he wants to prove he's a better husband.

It's the little things that count, but that's only if you're not nailing hookers on days of the week that end in "y".

Tuesday, October 06, 2009

The Fight Against Death

I just saw that MSNBC is letting one of their opinion show hosts do an hour-long free commercial for the Democrat's perspective on health care reform. It's called "Health Care Reform: The Fight Against Death." Ostensibly the argument is that public health care, onerous regulation and widening the already unacceptable felt cost/perceived value chasm (which I've explained before) will somehow cause people to live longer.

You know what causes people to live longer? Two things. Lifestyle changes and medical innovation. Outlaw smoking if you really want to do something about life expectancy in the U.S. Outlaw saturated fat. Outlaw high fructose corn syrup. Break down the garage doors of these purveyors of death and haul them off in flex cuffs if they fail to comply. Hell, you can fill them full of lead, Chicago style for all I care!

Then, you can force drug companies and research hospitals to crank up the innovation machine. To stop resting on their laurels and really get cracking. If there's anything that the government does well, it's mandating creativity!

Really, the "Fight Against Death" is waged by two people: you and your doctor. You may not realize it, but your doctor is actually more than one person. When your doctor prescribes Zocor for you because all the exercise, diet and supplemants in the world didn't get your cholesterol down to a reasonable level, your "doctor" is also every single researcher and tester in the development chain of that drug. The salesmen, too, heaven help us.

When you have that laproscopic procedure to remove that growth with minimal incision and recovery time, your doctor isn't just the surgeon. It's every person that developed, tested and practiced that technique. It's also the people who paid for it the first thousand times. It's probably some very rich people. Heaven forefend.

But if you remove incentives for the medical industry to innovate, and make no mistake that the rest of the free world's more socialized schemes have ridden for free on our backs for decades, then it really does just become you and your doctor. Well, maybe not your doctor. It might be the doctor that takes over your doctor's position when your doctor decides that the government approved payments just aren't worth the hassle anymore.

So yeah. Let's get on with this Fight Against Death.

Thursday, October 01, 2009

What the Government Should Handle

Any bunch of people can get together in this country and try to make something happen. There are roughly two ways they can go about this.

In the first, they can attempt to build their own organization, finding like-minded people to come along, possibly making some money or raising funding, etc. to accomplish their goals. That goal might be as simple as earning a paycheck, as when people come together in a business or company. That goal might be to cheer on the Steelers, as tens of thousands of people decide to do each autumn weekend in Pittsburgh.

In the second, they can come together to either get the government to do something on their behalf, or to become part of the government themselves and thereby generate the same effect.

The right to petition the government for a redress of grievance is made clear in the First Amendment to our Constitution. Clearly, it is both just and within the scope of our rights and duties as citizens to work through the government to solve certain problems. But the question of which problems are appropriate for government redress and which should remain in the private sector arises, and I think this is one place you'll find a stark breaking point between the small percentage of hardcore liberals and the vast majority of Americans.

The center of the question is the realization (oft state here) that the government is there as a legitimization of the use of force. Everything else is secondary, and subordinate to that fact. So, when deciding whether or not the problem you want to solve should be handled in the private sector (I want a paycheck!), or through the government (He stole my lawnmower!), one should establish whether or not they believe that the use of force is justified pursuit of the goal.

If it is, then go to the government, which is the way that we sanction the use of force in our society. If you don't someone threatened into doing your will, then keep it private.

So, for what outcomes are you willing to threaten force upon your fellows?

An interesting exercise is to think about different government services, local, state and federal, to figure out how the use of force is involved. I had a liberal once whine to me that "If you had your way, the city wouldn't have any snow plows! Everyone would have to get their own!" Ignoring the notion that private companies wouldn't fill the gap, it does point out the way my argument works. A locality (or state) providing snow plowing on the public dime actually fits in with this model. Clearing the roads doesn't require force, but what happens to the snow? It generally gets cast onto private property. In the case of driveways, it can cause individuals to actually do more work (or go to more expense) than they otherwise would have. The State is basically forcing the private property owners to accept a certain tonnage of debris.

So, this is a case where the use of force (you must accept this snow -- you have no choice) is properly set to the State. If it were only private organizations doing the plowing, what would stop them from being sued by some whiny individual who didn't want to have to reshovel his driveway entrance? Sure, you could... pass a law indemnifying snow plowing companies from suits like this, but in the end it amounts to the same thing. You need force to do it.

That's just a simple example, and if you're into that sort of thing it can be sort of fun to pick apart the different government services we use/fund, and try to figure out which ones properly use force and which ones are just boondoggles.

Monday, September 28, 2009

This Just Makes Me Sad

Chicago gangs murder honor student three blocks from school.

There's a video there, but I won't watch it out of respect for the kid who tried to help his fellow students against gang violence. I could see someone making a case for the opposite stand, though, and it wouldn't be without merit, i.e. paying witness to his end is the true show of respect.

After reading that article, I had intended to write something snarky about Chicago and Mayor Daley's assinine ban on all handguns, but after thinking about it for more than two seconds I realized that jokes weren't justified.

I am a staunch proponent of the Right to Keep and Bear Arms (and yes, I capitalize it), as I believe that history demonstrates that it is the one right that absolutely guarantees that the others shall not be taken away. Something like this couldn't make it clearer.

This \demonstrates both sides of the argument. Strict handgun ban -- how's that working out? Has it ended the violence? Just check Chicago's crime states. Guns are tools. People use tools to their own ends. They'll use other tools, including their fists. You can't abrogate the natural right of self defense of ninety-nine percent of the people just because you think it will make it easier to control the one percent that don't want to play by the rules. Foolishness.

On the other side, one person with a legal firearm and training could have stopped this. Just one. But there are no legal firearms in Chicago. It's a handgun free zone, don't you know. And that makes it safe. Doesn't it?

It just makes me sad.

I watched Watchmen the other day, and the one thing that really stuck with me from the book came through in the film too. Each of us is an improbability. A vast, nearly infathomable improbability. What are the odds that you, yourself, are where you are right now, who you are right now? As Dr. Manhattan says, seeing the person in front you of being exactly who they are is like seeing oxygen change to gold.

And that beautiful improbability from that family in Chicago? Gone now. Changed back into meaningless molecules.

Tell me again how the tools are evil and not the hands that hold them.

Thursday, August 27, 2009

How to Question a Terrorist

Hit the link in the post title to read an article about the, um, interesting restrictions placed on our interrogators by the Army Field Manual. One such rule regards lying to interrogation subjects. There are only a few lies you are allowed to tell:

You are allowed to pretend you know more about them than you do.
You are allowed to lead them to believe you are from another country.
You can do good cop/bad cop, which implies that you can pretend to be angry or unreasonable when in fact you are not.

This really bums me out. You all didn't know it, but I have been a private contract interrogator with the CIA for a number of years. I'm probably going to have to be done with that now, because throwing around lies was easily my most reliable method of getting information from subjects. Herein you will find some of the lies I've used to great effect, but which are now illegal:

The Lie: "I checked the messages, and no one called for you."

The Goal: To break the subject's spirit by implying the no one cares about them.

The Truth: The terrorist in question had four messages, although I think one was some random survey thing calling. I deleted all four. Just. Like. That.

The Lie: "Me [sic] and the other interrogators were going to go play Wii bowling off base tonight and wanted to ask you along. The Colonel said no. We really wanted you to go though."

The Goal: Good cop/bad cop, using the Colonel as the bad cop in absentia. Using this technique, the subject desperately wants to join the group (we only let them play XBox in their cells [duh, not XBox 360]), and gives up information to try to feel "in." GC/BC is still allowed, but this takes it too far in the clear infliction of emotional distress.

The Truth: We never had any intention of having him go along for Wii bowling. The truth just hurts sometimes.

The Lie: "I texted you like three times, honest. You never got them? I figured you were just ignoring me."

The Goal: Make the subject worry that their wireless provider has bad service and/or poor coverage in the cell block.

The Truth: I had told the subject I would text him after lunch, but thought better of it later. I never texted him even once. Well, I did, but I hit cancel right in the middle of the send, and I'm pretty sure it stopped it from going out. Sometimes we follow it up with "Everyone in D block is getting my texts, so I'm not sure what's up with yours." This breeds jealousy and distrust among the detainee population, a valuable tool.

The Lie: "I saw your sister at a bar last weekend, and she was acting totally slutty."

The Goal: Shake the subject's faith in his family's virtue.

The Sad Truth: We try to track all of our detainee's families in their native countries. His sister hadn't even been seen in the last few weeks, after her appearance showing waaaaay too much ankle in the "Taliban Gone Wild '09" calendar. One barely has to imagine what happened to her after exhibiting such decadent behavior in public.

And finally...

The Lie: "Guest what? Chicken butt."

The Goal: This one's insidious, which is probably why it's not on the approved list. The subject thinks that something awesome is about to happen. Maybe it's their birthday, and they're expecting cake. Maybe they think we're going to let them go. I don't know how these crazy people think, so I'm not sure what depraved wish enters their head when I ask "Guess what?" But I do know that it warms my heart when they excitedly answer "What?" and I crush their spirit with "Chicken butt." It gets me every time.

The Truth: There is no truth to this one. I think that's what hurts them the most. The entire question is a lie.

Without the ability to administer these kinds of mind-warping lies, I'm going to have to tender my letter of resignation.

Le sigh.

The Real Bad Guys

According to (a product of Investor's Business Daily), Honduras has captured and extradited a major drug and terrorist weapons supplier into U.S. authority. Good for them. Let me put you some knowledge (from

"As shadowy moneymen in the terror underworld go, not many are as unsavory as Jamal Yousef, an ex-Syrian military man turned terrorist arms supplier. Three years ago in Honduras, undercover U.S. agents caught him trying to sell 100 AR-15 assault rifles, 100 M-16 assault rifles, 10 M-60 machine guns, C-4 explosives, 2,500 hand grenades, rocket-propelled grenades and as many as 18 surface-to-air missiles to Colombia's FARC Marxist narcoterrorists."
There's just one problem -- they most likely have the wrong guy.

Look. We've all watched lots of movies and TV shows -- everyone knows that the only people who are international arms dealers that accept payment in drugs are American ex-pats and jaded CIA agents. All terrorist funding secretly comes from rich, white business men who are looking to perpetuate global chaos because that somehow works out for them. So, wrong guy. Q to the E to the D.

Wednesday, August 12, 2009

Let's Go To Church

For many years, the United Methodist Church has advocated for a Single Payer health care system. During the current attempt by the President and Congress to ram a health care bill through before anyone can read it, apparently the UMC has decided that it is going to try to throw its weight around.

Our church (St. Paul's United Methodist) evidently feels it is in the interest of Christian charity to support the current political position of the Democrat party on health insurance reform. They've said as much from the pulpit in the last few weeks (Health care reform now!) and today, they used their facebook account both to disseminate liberal health care reform propaganda and to point people toward a "Health Care Creed" on their website for members to sign.

Of course, this couldn't be what it looks like. You can't preach politics from the pulpit! It's just humanitarianism, my friends. The love of Jesus! I suppose that's a runaround the IRS buys. However, as the Health Care Creed that we are encouraged to consider points out, we should be honest. The United Methodist Church wants a Single Payer health care solution, and wants us to do what we can to bring that about. They stop just short of saying "Call your congressman!" But come on. There is only one group of people who have any desire to and can make this happen, and we all know who they are. Of course, it's not political.

I realize that many of the leadership team at St. Paul's feel strongly about this, and are willing to expend goodwill capital to bring it to the attention of the congregation. The beliefs of many in the congregation are diametrically opposed to this sought-after political solution, though, and believe as I do, that such a Single Payer system or public option that leads to such a scheme is in fact immoral. The leadership team's expenditure of moral authority is costing them in my eyes and in the eyes of others, most particularly when they deceive themselves into using the spiritual pulpit for political ends.

But all told, I suppose I should to submit to the notion that we should let the government take our labor by force and give it to those who are deemed in need by bureaucrats. Doesn't that count as helping your neighbor?

As Jesus often said, "Let's get the government to do something about it."

Simple Healthcare Economics

I was just checking out some of the ads on craigslist that want you to "HELP SOLVE THE HEALTHCARE CRISIS - MAKE $9-13/HOUR!". And, while they aren't speaking (directly) for the current Presidential administration or band of syphilitic baboons inhabiting the Capitol Building, they do give an insight into the left's popular perceptions.

Simply put, the left feels thusly:

THE PROBLEM: Health insurance premiums are already too expensive for people of modest means to afford, and are quickly becoming unaffordable for an increasing number of Americans.

THE SOLUTION: A government-run health insurance plan.

While it's certainly an extremely distilled version of the position, I think it's a fair one. It is, really, the essence of both their argument and their solution.

So, the question one must ask when presented with this point of view is: how does the proposed solution actually solve the problem? In other words, what is the mechanism by which it will function?

First, I think you have to address the initial problem. The main weakness of the leftist argument in this case is that they have defined the problem incorrectly. The proper addendum to the leftist problem statement should most likely read "...for an increasing number of Americans DUE TO CORPORATE GREED." They believe that the greater-than-inflationary rise in health care prices and subsequent rise in insurance premium pricing is due in large part to corporate (read: big pharma, big hospital and big insurance) greed. Unfortunately for all of us, that is not the case.

Look -- I have no doubt that people in the insurance industry want to make as much money as they can. So do hospitals. They want to be able to stay in business, and continue providing jobs and even raises to their employees and nice payments to their shareholders. In that sense, they are greedy, which makes them no different than any other industry or business in this country. And yet, somehow, greed in this industry is a problem. A systemic, show-stopping problem.

The statement that "many people involved in health care want to make lots of money" may be an indictment on its face to leftists, but to me it is not. In light of the fact that our capitalist system (i.e. greed) in the United States has lead to the greatest period of prosperity and human rights of any other system in the history of human existence, and of the spectacular failures of command-based systems (socialism, communism, touchy-feely-Euro-lite-socialism) to be able to produce any effect beyond the furtherance of mediocrity and often much, much worse, simply accusing "greed" of something bad doesn't fly.

Okay, you don't know it, but I just wrote a whole big long thing then deleted it, because this is simpler than eating baby food and there's no need to be verbose:

- Healthcare services are perceived as valuable.
- Due to the way that Medicare, Medicaid and employer-deducted health insurance are structured, healthcare services feel either free or nearly free to us.
- A system in which something of great value appears to be given away at an enormous discount at all times is unsustainable due to basic economics.

We're just now starting to see that unsustainability.

Adding a government run health insurance plan would do what, folks? That's right -- make healthcare services feel like even more of a discount than they do today.

We all pay for the healthcare services that are distributed today: through co-pays (which are very small -- our only real "felt cost" in the system -- compared to the value of the services we receive for them), payroll taxes (Medicare, etc.), and before-tax deductions for employer-bought health plans. We are paying for this stuff, but it doesn't feel like it to us because we never saw that deducted money in the first place. That causes everyone to act differently than they otherwise would, severely distorting the market.

So, if we believe the theory that prices are rising quickly due to corporate greed, we implement a government insurance plan. A public option. Unfortunately, that only makes the real problem -- a felt cost versus perceived value imbalance -- much worse. That kind of system, as we see with Medicare, is unsustainable. It has a finite economic horizon.

We need to address the base problem -- felt cost/perceived value. The perceived value is either going to remain the same or go up over time as new, better treatments become available. We cannot, nor would we want to, harm the perceived value of healthcare services. What we need to do is to change the felt cost side of the equation. We're already paying for this stuff -- it just doesn't feel like it.

I contend that the only way to restrain the future charged price of healthcare services is to take a more market-based approach, and that begins with removing health insurance as an untaxed benefit of employment. It's compensation, and should be treated as such. When people see that they can either have health insurance or, say, $450 more per month in their paycheck, behaviors will begin to change, which will in turn change the pricing structures of providers.

Friday, July 24, 2009

Misplaced Compassion

Does anyone bother fisking Krugman these days? Doubtful. If it hadn't been for one of our friends sending Joy a link with a positive admonishment about this column, I wouldn't have bothered. However, after reading something of such colossal and fancible horror as this, I am compelled to respond. And so:

Fisking "Costs and Compassion -- by Paul Krugman"

The talking heads on cable TV panned President Obama’s Wednesday press conference. You see, he didn’t offer a lot of folksy anecdotes.
Right. There is a well known causative correlation between folksy anecdotes and cable TV punditary approval. Oh wait -- he's setting up his "Obama rulez Bush droolz" point for later.
Shame on them.
Yeah -- shame on them for criticizing the President's lame performance and meandering, vague responses when he's working for the cause. Aren't you on board, commrades?
The health care system is in crisis. The fate of America’s middle class hangs in the balance.
A crisis, and the very fate of the middle class you say? According to whom, and by what metric? In general, the word "crisis" connotes an impending disaster. And, while the Federally funded Medicare program certainly faces the result of its structural shortcomings a couple of decades from now, no portion of our nation's healthcare system can be said to be currently in "crisis." This is a buzzword used in the same way that used car salesmen tell you that it's urgent that you drive that car off the lot TODAY. So, any arguments that Krugman presses in the rest of this piece that are based on urgency fail, on their face.
And there on our TVs was a president with an impressive command of the issues, who truly understands the stakes. Mr. Obama was especially good when he talked about controlling medical costs.
Hagiography. Irrelevant.
And there’s a crucial lesson there — namely, that when it comes to reforming health care, compassion and cost-effectiveness go hand in hand.
Okay -- we're finally to his premise: "compassion and cost-effectiveness go hand in hand." Let's see how well he does supporting that postulate.
To see what I mean, compare what Mr. Obama has said and done about health care with the statements and actions of his predecessor. President Bush, you may remember, was notably unconcerned with the plight of the uninsured. “I mean, people have access to health care in America,” he once remarked. “After all, you just go to an emergency room.” Meanwhile, Mr. Bush claimed to be against excessive government expenditure. So what did he do to rein in the cost of Medicare, the biggest single item driving federal spending? Nothing. In fact, the 2003 Medicare Modernization Act drove costs up both by preventing bargaining over drug prices and by locking in subsidies to insurance companies.
He's off to a piss poor start. First, President Obama hasn't actually done anything yet, so we can't really compare what he has "said and done" -- only what he has said. The quote from President Bush, while appalling to a certain group of people, is in fact accurate. And, while our previous President claimed to be against excessive government expenditure as Krugman notes, his actions in no way bore that out. If one is only familiar with liberals and liberal circles of friends (like, say, Krugman), one might not understand the fact that most conservatives and Republicans supported President Bush mostly on the basis of his foreign policy and were either ambivalent or openly hostile to his excessive domestic spending. Of course, one thing that Krugman decides to skip, because it shoots his argument in the ass, is the Medicare prescription drug program. This was a Bush initiative (bastard), and drastically increased Federal Medicare spending. From a liberal standpoint it was extremely compassionate -- hundreds of thousands of seniors could now "afford" drugs that they could not before. But where was the cost-effectiveness? It's no wonder Krugman chose to only mention it in the most tangential fashion.

Secondly, it does not matter what previous Presidents have said or done on the topic, unless they have tried something that worked particularly well or failed particularly awfully. President Obama's ideas must rise or fall on their own merit. Claims of "the last guy was horrible!" are completely irrelevant.
Now President Obama is trying to provide every American with access to health insurance — and he’s also doing more to control health care costs than any previous president.
To what kind of health insurance is President Obama trying to provide access? Is it going to be any good? Is it going to be as good as, say, service from PennDOT? Or the IRS? I can say that I want to provide everyone with access to a car, but if that car turns out to be a Ford Pinto it's not really that great of a goal, is it? So, by making an extremely broad statement, the President is able to let everyone write into it what they would like to imagine. And, when he shows up with a fleet of Pintos, be able to say "But this is what you asked for!" Beware the man who says that everyone can drive a BMW, and that it will only cost everyone half as much if we all do it.

As far as "doing more to control health care costs"... please. He hasn't actually done anything. Basically he has said "We need to control the cost of health care. We will do it." That is stating a goal. Stating a goal is not the same as doing something. I can say that I'm going to pole vault in the next summer Olympics, but it's probably not going to happen. On the other hand, President Carter not only stated that he was going to control gas prices -- he actually did something about it! And look how well that worked out. I can't wait until President Obama tries to bend the laws of nature in a similar fashion with our health care.
I don’t know how many people understand the significance of Mr. Obama’s proposal to give MedPAC, the expert advisory board to Medicare, real power. But it’s a major step toward reducing the useless spending — the proliferation of procedures with no medical benefits — that bloats American health care costs.
He's right. I don't understand the significance. However, Krugman doesn't explain it, which means one of several things. 1) He doesn't understand it himself (probably not the case). 2) He doesn't want to say because it is detrimental to the overall liberal goal of a de facto single payer system. 3) He was near his column's word count and had to cut something. So, since he's unwilling or unable to actually describe what makes it so awesome, asking us to take his word for it (argument from authority), we'll have to discard it.
And both the Obama administration and Congressional Democrats have also been emphasizing the importance of “comparative effectiveness research” — seeing which medical procedures actually work.
This type of research is probably a good thing, but who do we want to have doing it? Do we really want a governing body that decides who can and can't have certain treatments? Once you get into that territory, you run a lot of risks. People start to game the evaluative procedures, lobby, play politics, etc. Personally, I would rather have innovative physicians -- physicians are the ones that come up with new treatments, by the way -- focused on actually coming up with great new medical techniques that might save or extend my life or the lives of my loved ones in the future, instead of, say, wondering how they can game their results to pass the cutoff of a top-level government panel. The truth is that almost all of the treatments we take for granted today began their existence as expensive, experimental procedures. Their effectiveness increased over time as doctors became more familiar with their ins and outs and more practiced in their delivery. Their costs fell as they became more common and eventually commoditized. Sit an effectiveness review board on top of a decreasingly privatized insurance system, and you can say goodbye to innovation.

One suggestion I recently saw seemed to make sense. It was a recommendation for a reviewing organization along the lines of the National Highway Traffic Safety Administration. The NHTSA has no legal or regulatory authority whatsoever. They are also generally staffed by people of professional integrity whose goal is to test, analyze and report the facts as they discover them. They learn things, and publish recommendations on a variety of transportation safety topics. Everyone is free to take their expert advice or not. Most people respect them, their mission and their results. I would not be averse to something of this nature, but the important thing is that it would have to have no regulatory authority.

The notion of having a board that decides with authority what is effective and what is not comes from the same fundamental conceptual flaw that generally governs liberal tax policy -- assuming a static system. When adjusting tax rates, the government can never really be sure what will happen. Of course, that doesn't stop them from assuming static systems such as "if we raise the income tax an additional percentage point, we'll get one percent more revenue," completely oblivious to the fact that edge cases will alter their behavior, sometimes significantly altering outcomes. Sure, if somehow medical technology froze right where it is today, this would make some kind of sense. But the field of medicine, like our economy in general, is made up of dynamic actors who change their behaviors in reaction to changes in the playing field. Like the economy and the adjustment of tax rates, our medical system is complex enough that to make fundamental changes to it will most likely not result in the exact behavioral alterations that your giant-brained advisors had promised you.
Many health care experts believe that one main reason we spend far more on health than any other advanced nation, without better health outcomes,
Bullshit. I'm assuming that Krugman is narrowly reading life expectancy statistics for this "without better outcomes claim." I've seen that before, and it's dishonest. If that's the case, and since he doesn't source his comment we'll just have to assume it is, he's implying that longevity is the single best way to measure the relative effectiveness of varying health care systems. Krugman makes the mistake of supposing that incremental gains in life expectancy once you've passed a certain level of basic civilization (antibiotics, handwashing, sewerage, etc.) is dependant on health care. There is no evidence that it is. What if aging and the eventual end that we all face at its hands is statistically consistent across populations? If so, then once the basics of civilization are achieved, longevity becomes an increasingly poor measure of health care. Better measures would be: length of wait to receive care, quality of life with illness, days lost to illness or injury after the decision to seek care is made, days ill/injured verus days well. If you really think that we don't have better outcomes, why don't you try getting breast or prostate cancer in these other "advanced nations" and see how you fare? Would you like a fifty percent lower survival rate (breast) or a four hundred percent lower rate (prostate)?

The "no better outcomes in the U.S." notion is a canard, based on a few cherry-picked statistics.
as is the fee-for-service system in which hospitals and doctors are paid for procedures, not results. As the president said Wednesday, this creates an incentive for health providers to do more tests, more operations, and so on, whether or not these procedures actually help patients.
This is ridiculous. Does any health care provider (doctor, hospital) in the world get paid per outcome? Please show me where that is and how well it's working. Until then, I'd prefer that we don't gamble a significant portion of our economy -- not to mention our very lives -- on a completely untested approach that these geniuses think might be a good idea. Of course, the immediate flaw in fee for outcome that springs to mind is that doctors and hospitals will be significantly less likely to want to perform risky procedures, or even ones that don't pay off. Krugman's an economist so he should get this pretty easily. If you do x procedures a month, 85% of them succeed and you only get paid for successful procedures, what do you think happens? Do you think that perhaps the cost of performing those failed procedures, which is the same to the provider regardless of outcome, might get rolled into the bills of the successful procedures? Well, you say, we'd just make that illegal! Then you find yourself in a situation where doctors and hospitals will only perform the most certain procedures in their books. Well, you say, we'd just mandate that they perform them! You can keep going down that road until doctors work at the point of the government's gun. Now where have we seen that before? So, say goodbye to progress. On the other side, providers that choose to perform less-than-sure procedures will quickly find themselves out of business, because they can't charge for a significant portion of the work that they do. Either way, it's very very bad for everyone who needs health care, which is... every single one of us.
So where in America is there serious consideration of moving away from fee-for-service to a more comprehensive, integrated approach to health care? The answer is: Massachusetts — which introduced a health-care plan three years ago that was, in some respects, a dress rehearsal for national health reform, and is now looking for ways to help control costs.
Massachusetts' plan is a disaster. It meets the liberal goal of universal coverage though, so people like Krugman will happily gloss over it. And of course it's now looking for ways to control costs. What is wrong with these supposedly intelligent people who don't understand that when you present something that is obviously valuable (health care) as though it were free or seriously discounted (universal coverage, government plans like Medicare, etc.) people will hoard it. In the case of a service like health care, hoarding behavior shows up as over use. Unnecessary use. And, when you have people overusing a limited a resource, what happens to its price? It goes up. Do I even need to say "Duh" here? More on this at the end.
Why does meaningful action on medical costs go along with compassion? One answer is that compassion means not closing your eyes to the human consequences of rising costs. When health insurance premiums doubled during the Bush years, our health care system “controlled costs” by dropping coverage for many workers — but as far as the Bush administration was concerned, that wasn’t a problem. If you believe in universal coverage, on the other hand, it is a problem, and demands a solution.
Dropping coverage, while tough for individuals, is the system's way of controlling the balance between supply and demand. No one has ever said that markets were compassionate. On the other hand, any attempt by the government to inject compassion into the equation -- especially in the form of universal coverage -- will quickly get a lesson in basics economics when costs begin to rise even more quickly than before. It's compassionate for a little while, until the system collapses under the weight of its fundamental flaws. After that, everyone's screwed. Funny, that sounds like another system that was touted to be compassionate, caring about the little guys, etc., for quite a while. And then it went to shit and crushed everyone in it's path. What was that called? Was it... communism? Yeah. It was. The same bunch is pushing for this, apparently because they understand neither history nor basic economics.

So, I guess it comes down to how you want to take your chances. Do you want to take the gamble that as the health care market corrects itself over time (and it will), you'll be able to do for yourself and those around you by your own merit? The limits of the market-based health care system are that if you find yourself in certain income ranges and without a job, getting health insurance probably isn't going to happen. But your fate is in your own hands. Perhaps you get a different job (acknowledgedly difficult)? In this country, if you really need to make more money, you can almost certainly do it. You might not like what comes along with it (more hours, less family time, doing something you don't like, etc.), but you CAN do it. It's an option, and the choice is yours. But the "universal coverage/single payer" people like Krugman will tell you that you don't need to make that choice. In fact, they claim that it is immoral for people to have to make that choice, and in your gut you may agree with them. It feels crappy that the world is full of tough choices. But they claim that they have a solution. The problem is that their solution has systemic flaws that in the end reduce the quality of health care, in some cases drastically. When their blue ribbon panel decides that that cancer treatment for your Dad just isn't effective enough to waste public funding on, what can you do? Getting an exception from the Federal government is like getting light from mud. It just isn't happening. The worst part of that situation is that there is nothing you can do. You can't take a second job to pay for something extra, regardless of the tradeoffs that might require. There is nothing extra. You're just screwed.
Beyond that, I’d suggest that would-be health reformers won’t have the moral authority to confront our system’s inefficiency unless they’re also prepared to end its cruelty. If President Bush had tried to rein in Medicare spending, he would have been accused, with considerable justice, of cutting benefits so that he could give the wealthy even more tax cuts. President Obama, by contrast, can link Medicare reform with the goal of protecting less fortunate Americans and making the middle class more secure.
Ah, just has to throw in the most wonderful leftist class warfare "tax cuts for the wealthy" turd, doesn't he? When treatments are new and very expensive, who gets them? Who pays cash for them? The... wealthy? What happens to those treatments over time? If they prove effective in the field, they become more popular, and their cost goes down. Eventually, it becomes something routine like angioplasty. Who do we have to thank for routine miracles like that? Who essentially funded them in their infancy? It couldn't be the wealthy, could it? Because, like, they're evil or something.

And I'm not even sure what it means to "link Medicare reform with the goal of protecting less fortunate Americans and making the middle class more secure." Sounds like a good mission statement though.
As a practical, political matter, then, controlling health care costs and expanding health care access aren’t opposing alternatives — you have to do both, or neither.
Just a restatement of his premise, which is clearly lacking.
At one point in his remarks Mr. Obama talked about a red pill and a blue pill. I suspect, though I’m not sure, that he was alluding to the scene in the movie “The Matrix” in which one pill brings ignorance and the other knowledge. Well, in the case of health care, one pill means continuing on our current path — a path along which health care premiums will continue to soar, the number of uninsured Americans will skyrocket and Medicare costs will break the federal budget. The other pill means reforming our system, guaranteeing health care for all Americans at the same time we make medicine more cost-effective. Which pill would you choose?
I really hope he wasn't referring to The Matrix. If he was, he's an idiot. The President recommended the "blue pill" in his speech, which in the movie was the path to ignorance. The Red Pill, though certainly the less compassionate road, was the eventual road to knowledge and self-actualization. Oh wait -- maybe he did get the reference correct after all.

Contrary to Mr. Krugman's flawed premise, this is not about compassion at all.

The problem of rising costs in health care is systemic, and not due to the reasons stated by the Obama administration and their friends in Congress and the press. It is also relatively simple. In any economic system, artificially reducing, removing or obscuring the cost to the endpoint consumer of a valuable good always results in an increased demand for that good. This is why stores hold sales, why rebates move merchandise, and why KFC had to put after-the-fact restrictions on its free chicken coupons a couple of months ago. An increase in demand without a consequent increase in supply raises the cost. That's the bedrock of economics. Sadly, when costs are routinely hidden, it creates a feedback system in which the good becomes even more costly, and its value in the eyes of the consumer is increased that much more -- the perceived value compared to the felt cost rises -- creating an incentive for even greater consumption. At some point, you either run out of goods or are unable to provide as much service as consumers request.

There is no doubt that the poorest people in our country are hurt by the quickly rising cost of even basic health services. But the real question shouldn't be "how can we cut them a check so they can afford it" but "why are the costs rising so much more quickly than general inflation?" One reason for that rise in cost is simple and obvious: the development of new procedures and drugs is very expensive, and consumers demand progress. The other is the previously stated economics of felt cost versus perceived value. Each of these problems have fairly simple solutions, although they fly in the face of liberal "compassion," and addressing the latter actually helps with the former.

As a whole, Americans actually do pay for their health care. They do it in the form of co-pays and sometimes deductibles, but the vast majority of that outlay comes in the form of "employer provided" health insurance. The problem is that that cost is simply not felt.

The notion that your employer somehow provides the insurance is misleadingly falacious. A more accurate way to phrase it is that your employer is acting as a reseller for the health insurance companies. The amount of money that your employer pays to the insurance company every month is truly income that you've earned, regardless of how the IRS chooses to view it. The simple act of changing health insurance from "benefit" status to an honestly stated payroll line-item would change a lot. How much does your employer pay per month for your coverage? Do you know? Some employers offer a small bonus if one forgoes this "benefit," but it is usually only a fraction of the actual amount they pay. For example, let's say you love your health insurance -- it's just fantastic -- and your paycheck (after tax and regulatory changes) shows that every month your employer buys it on your behalf for $563. If you could tell your employer that you'd just rather have the cash (note -- employers will not do this because remember, it's a "benefit", not income that you've earned) and could find a policy that was almost as good but cost $100 less per month, wouldn't you do it? I know that a lot of people would. That creates an immediate downward pressure on pricing, as well as better offerings from different providers who are hoping to hit different tiers of price/coverage tolerance.

So, if the vast majority of consumers are actually seeing and feeling the amount of money they pay for the coverage they receive, the structural problem of the felt-cost/perceived value disparity that generates run away prices is largely eliminated. But who pays for the new, really expensive stuff? Well, if we had an independent non-regulatory body that evaluated treatments for effectiveness, many insurance companies might begin to tier their products based on that body's recommendations. In other words, one insurer makes a plan that covers everything in the new NHEB's (National Healthcare Efficacy Board) A-rated treatment guide for $350/month for your family. That's their most basic level, for the most effective stuff. They also have a plan that covers everything in NHEB's A and B-rated treatment guides for $450. Want the stuff in the C-rated guide? $750. Want the crazy, just brand new stuff all the way down in the G-rated category? $1500. But the good thing is that you know up front what you're getting, and can compare the relative costs and benefits with open eyes. And the best thing is that there will be people, most likely plenty of people, who will be willing to pay all-out for that $1500/month plan, or who will just pay it out of pocket. Who are those people? Well, Paul Krugman and President Obama call them the wealthy, and I guess they might be. However, while they look down on these people for their wealth, to me they look like the venture capitalists of the health care industry.

As time goes on and newer treatments are developed, those treatments that started off in the D and E groups might become more succesful (and cheaper!) as more people use them and doctors become more familiar with them. Eventually, they slide up and become B and C-rated procedures. The stuff that really doesn't work that well or that often stays down on E, for example. Everyone wins.

It really appears that Krugman is forgoing any kind of economic rationality in this piece in favor of his political dogma. I've heard it said a number of times that Krugman is a brilliant economist but pretty terrible when it comes to political thought. Obviously, the one is bleeding into the other, and I don't think it's to his credit.

Tuesday, July 07, 2009

Oh Noes! The State Might Have to Cut Jobs

"Gov. Ed Rendell said state government will lay off close to 800 employees because of spending cuts that are likely." states the Associated Press.

Rendell says this as though it's a bad thing. He's been zipping around the state, trying to convince everyone that they should give him (good-for-nothing piece of crap) more of their hard-earned money. During a recession. Good luck with that, chief.

But if the state will have to fire employees, does that mean the size of the state government is shrinking? At least by one measure, and to me that's a good thing.

This argument from statists always amuses me: "You'll be causing unemployment if you don't pony up!"

Don't they understand that to many of us, a shrinking of the government's payroll is a good thing?