Magical Sharks

A couple of entertainments: http://www.nytimes.com/2010/11/02/science/02angier.html?ref=science http://www.theatlantic.com/magazine/archive/2010/11/lies-damned-lies-and-medical-science/8269/

The second is impressive and delightfully deflates the arrogance of doctors. They're not as clever as they think and generally understand little of either math or science--which is unfortunate, since optimal medical care is based mainly on math and science. They oftentimes forget this because their gradual accumulation of anecdotal experience eventually comes to overwhelm in their minds their theoretical knowledge. In other words, within a few years of leaving medical school, they can no longer see the forest for the trees (or is it that they can't see the patients for the dollar signs? or that they can't see reality for their god-complex?). I think a few mathematicians and physicists are needful at the commanding heights of medical research and administration--to herd these MDs in the right direction.

Two Takes on Health Care

These are the two best articles I've read on the issue. Both generate different diagnoses and plans of action, but an interpenetrating mediation of the two seems possible and beneficial. At an intellectual level, health care is a genuinely challenging policy conundrum. By the way, both articles were recommended by David Brooks.

http://www.theatlantic.com/doc/200909/health-care

This offers a well-analyzed reform plan.  

http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande?currentPage=1

This one is written by a practicing physician who set out the determine why some parts of the country spend 3 times as much on health care as other parts--and, no, the difference had nothing to do with cost of living differentials. The conclusion is encouraging in some ways (in that costs can be reduced about 30% without systemic changes and without loss of quality). What is depressing here is that those cost cuts would come from doctors studiously ignoring the costs of care (in the context of a quasi-socialist organizational structure)! The author found that current high cost parts of the system are those that attend most closely to this cost with purpose to increase it for their own profit. It seems that it may be too much to hope for a system that is cost aware with the intent of controlling costs improving quality.

Brooks Casts His Vote

http://www.nytimes.com/2009/12/18/opinion/18brooks.html I agree with his conclusion and most of the reasoning behind it. But, I wonder that he is so reluctant to vote no. The fundamental problem is cost control, and he explains why this bill is likely to do nothing at best on this issue, and may make it worse. The uninsured are a secondary problem because the vast majority (probably about 80%) fall into one of several categories who do not deserve handouts: illegal immigrants, the voluntarily uninsured, the voluntarily poor, and those who would like insurance but who, by placing other discretionary priorities above it, have too little money remaining to pay for it.

President of the Rest of the World

BO has come up with a new justification for blanket legalization of all illegal immigrants: they have to be legal to benefit from Obamacare. This is nuts. We're already far too generous with illegal immigrants. This would certainly increase the flow of illegals and thereby increase the tax burden of citizens. We have the most generous legal immigration system in the world: why should we reward these illegals whose first act, invading our national territory without legal permission, was a crime?

A Better Way

http://www.theatlantic.com/doc/200909/health-care This article provides the best (by far) diagnosis, prognosis, and treatment plan for health care in America that I have yet seen. It is what the republicans ought to have attempted when they had the chance, but were never bright enough nor bold enough to leap after, and instead submitted to Bush's idiot idea to expand Medicare.

Illegal Health Care

http://www.nytimes.com/2009/09/06/health/policy/06immighealth.html?hpw Illegal immigrants are supposedly not subsidized for low income under the Obama plan, but they can enroll in the "public option"--which is by definition subsidized. This will not only effectively legalize illegal immigrants, it will clearly encourage more to illegals to come so to avail themselves of their "legal" rights as illegals. This proposal is especially audacious (or shameless) in the current economic circumstances. Who does this guy work for? Something like this doesn't even benefit the blacks (BO's favorite recipients of nepotistic patronage), except indirectly insofar as more Mexicans may abett long-term Democratic political power.

Parasitic Contagion

http://www.slate.com/id/2227082/

This is an excellent article. It points to the fundamental divergence that the payment methodology creates between the priorities of doctors, patients, and the economy as a whole. The angioplasty example demonstrates this: doctors generally recommend angioplasties for stable chest pain because they are paid much more for that procedure than for counselling the patient to alter his lifestyle, which is just as effective--the doctor increases his income, the patient's outcome is the same, and the economy overpays for the result. This is not defensive medicine, it is offensive medicine.

 

But, I wonder about the implication that more GPs are needed to increase preventive care. Would this really have a significant impact (of course, the angioplasty scenario implies that it does in some cases at least)? And, if what this mainly entails is basic advice on a healthy lifestyle, do we really need $150/hr doctors to be the conduits of this advice? Wouldn't nurses or physician's assistants or even social workers be sufficient, especially if they had the explicit imprimatur of a physician to invoke greater authority?

 

In the end, so long as the cost-benefit trade-off is not accounted for in medical decisions, and technology continues to improve, and no one has sufficient motive to institute rationing, the medical sector's costs will continue to rise, there being no natural limit to its size and scope.

 

600,000 doctors control a sixth of the American economy--that is, 0.2% of the population controls 16% of the economy. Possibly this is a harmful concentration of power, particularly given that their profit corresponds to some degree to how much of the economy they control. Not coincidentally, they pay themselves about 3% of national income--also rather concentrated. Of course, they make almost no effort to restrain medical costs, since there are no incentives for them to do so. Shockingly, this essentially non-market system of exchange has proven to be highly inefficient and flagrantly corrupt--high costs, mostly mediocre outcomes.

A socialist system can only function at all when supported by a capitalist system. But, when the socialist sector grows too large it begins to distort the private sector with excessive tax burdens and unavoidable "economic" interactions with the socialist sector. At some point, the relentless logic of ever-greater socialization cannibalizes the private sector, that is, the private sector begins to shrink in absolute terms. In course of this process, economic growth declines and faith in capitalism follows, due to popular misunderstanding of the causal relations involved. We are now not far from this threshold--perhaps only 10 to 20 years.

A Democrat Contra the Democrats

http://www.salon.com/news/opinion/camille_paglia/2009/08/12/town_halls

This is a better critique (and certainly a livelier one) than I can remember seeing from a Republican.

Shipbuilding

http://online.wsj.com/article/SB10001424052970203946904574300482236378974.html
I agree with both the criticisms and the recommendations. Yet they come up short. There are at least two major lapses here: he does not indicate how to reduce frivolous lawsuits without threatening meritorious ones and he does not really address the incentive for doctors to order unnecessary tests and procedures to line their pockets. Also, though the "pay for performance, not activity" recommendation would help to some degree, there seems little else here that would constrain the explosion of the costs of Medicare/Medicaid. Cost/benefit analysis and imposition will be unavoidable. Jindal's program would make a start (and I mean a start at building a better ship with lower running costs, unlike the Obama plan to invite a bunch of new passengers aboard from Mexico and turn over the ship's operation to the ship's treasurer)--but it does not suffice.

Dumb and Dumber

http://www.forbes.com/2009/06/30/obama-health-care-reform-opinions-columnists-public-option-medicare.html

This is a quality breakdown of the great Obama conspiracy. Of course, it begs the question: what have the republicans to offer as a counter? Assuming systemic reform is unnecessary is head-in-sand stupid. The single government action on this issue in the last 8 years only made things worse. But, as bad as throwing a couple of extra rocks in our backpack was, Obama now wants us to divert into the socialist swamp.

I do side with Obama on the cost-effectiveness initiative--despite clear risks, it is one of the few things anyone has proposed that might actually provide a rational route to cost control.

More Health

http://newsbusters.org/blogs/noel-sheppard/2009/06/14/george-will-tells-dirty-little-secrets-universal-healthcare

Pretty clean counter-arguments from Mr. Will. My only disagreement with him is relatively minor: most people actually are too stupid to determine what a competitive health plan is. However, this is of limited consequence since the vast majority have their plans selected for them (or narrowed down) by their employers or the government.
 

Obama knows that even the smallest, most modest "government option" on health insurance opens the door to an almost inevitable socialization of the system, however gradually it may occur. A government option will destroy competition and grow ever larger--and the larger it gets, the more people it covers, the more voters will support it, creating a self-sustaining cycle of continuous growth. Entitlements last forever because none of their natural predators can match them--their vicious cycle of growth and influence confers immortality.  

 

The AMA knows this and is running hard against it. Their problem is that the status quo sucks, with no good options to rectify it. Between greedy doctors, greedy lawyers, incompetent bureaucrats, and patients with no incentive to restrain costs--we spend an enormous amount on health care for results that, on the whole, are no better than countries that spend half as much and which, as a result, have a competitive advantage in business. But, you can't bring doctors under control without second-guessing them or putting them all on salary. The lawyers, at least in theory, keep a lid on the problem of incompetent, dangerous, and negligent doctors. Bureaucracies attract incompetent, unmotivated people, then fail to incentivize them properly--and are never efficient in managing complex systems. Most patients are too stupid to respond effectively to incentives even when they're in place. It's very difficult to do much about any of these four problems, and very little has been done. Obama has talked about restricting doctor's options through cost-effectiveness analysis, and about reducing legal costs and defensive medicine costs by limiting malpractice suits--a good start if he can make it happen. But, his plans will make the bureaucracy problem much worse and probably do nothing for the incentive issue.

On Health Reform

http://www.nytimes.com/2009/06/14/business/economy/14view.html?ref=health I think this paragraph is key to the problem, and the main reason why reforms of the health system as a whole have yet to happen, despite the huge cost burden the system now inflicts: "Of course, we have not made such Medicare spending cuts yet, and there are few signs that we will. A Kaiser Family Foundation poll found that 67 percent of Americans believe that they do not receive enough treatment and that only 16 percent believe that they have received unnecessary care. If the Obama administration covers more people with government-supplied or government-subsidized insurance, the political support will broaden for generous benefits, their continuation and, indeed, expansion of current expenditures." Essentially, people become dependents and develop a dependency psychology--they come to prefer safety and ease to freedom and power. At the end of the process, you get Europe, that is, stagnancy and weakness. Europe has been ripe for conquering and eager for submission ever since it was socialized in the 30's. Most of the continent transitioned directly from a class-determined social system in which the great majority had neither power nor responsibility directly to socialism in which the same basic conditions prevail--the lack of freedom and responsibility. Only America saved it from itself: we reversed the tide in WWII (which was a socialist tide), we held the line against full socialization during the Cold War, and the ongoing Muslim influx simply represents a new opportunity for Europe to surrender.

The Scorched Earth Strategy

Bush and the republican sheep who followed him have put the party into such a hole that nationalized health care may be unstoppable this time. Bush and Greenspan also managed to severely damage the reputation of capitalism. From the beginning, even before he was elected, I wondered who was behind Bush, who the real power and brains could possibly be--I could never conceive of Bush being anything other than a puppet. But, I still wonder, who are the puppetmasters? Cui bono? It's too depressing to believe the straight story, that the entire Bush era was a succession of stupidities and accidents.

Health Costs

The fundamental problem in the health system is a gross misalignment of incentives. Neither the patient nor the doctor directly bears the burden of the medical expenses they incur. Consequently, their incentive to minimize the expense, or at least to recognize the notion of a cost-benefit trade-off, is heavily diluted. The failure to recognize a cost-benefit paradigm by juries at malpractice trials also distorts incentives and causes doctors and patients to demand too many medical services. Socialization will not correct this incentive issue; instead of a better alignment of incentives, it will only create a different misalignment.

Given the pace and nature of technological advance in this field (which is the prime cause of the vast increase in health costs) over the last few decades, assuming technology fails to provide any significant countervailing trends that reduce costs (eg, automation), America is on a path to becoming a well-armed nursing home.

But, we should bear in mind that we are by far the greatest source of innovation in this tremendously important field. And a vital part of this competitive advantage is clearly attributable to the element of private sector profit-seeking. This innovation benefits America enormously and its influence in the world is actually one of the greatest practical forms of American philanthropy. The two primary costs of socialization (and financial realities make this virtually inevitable sometime in the next 20 years) that we should seek to minimize are the diminution of personal liberty and the slow death of the culture of innovation.

Health Care Realities

I posted this response to a Krugman editorial that denounced McCain's health care policy proposal (which seems to be based on salutary market principles, but appears highly questionable in practice):

There is a fundamental distinction between health care and other sectors of the economy. The great majority of Americans will not in practice or in theory accept the appearance of unequal health care between the rich and the poor. In virtually every other area there is acceptance of this inequality, even in education. And, since the affluent demand a high level (ie, an expensive level) of care, the rest of society expects to receive a level of care reasonably comparable. This means health care will be very expensive and a significant part of society will be unable to pay the true price of their health care. Consequently, the affluent subsidize the less affluent through various government programs and in a number of other less visible ways (like free care for the indigent in emergency rooms).

 

The republican party notices this final result and denounces the economic unfairness of such redistribution and its economic inefficiency (stemming from lack of incentive to reduce medical costs on the part of those who do not pay for them). The democratic party notices that care is not in fact perfectly equal (though it is much more nearly equal than income)—and it denounces the unfairness of unequal treatment and its economic inefficiency (due to relatively limited preventive care available to the poor, which causes health problems to be ignored until they become serious and expensive).

 

McCain’s solution is absolutely irrelevant because it will never pass Congress. Why even analyse it?

 

But, Obama’s plan takes on a special signifance because the democrats will control Congress. One element not in his plan is any credible attempt to limit the increases in health care costs as a whole. This is the essential problem: health care absorbs 16% of GDP, and health costs grow much faster than GDP. Instead, Obama wants to shift around the costs by forcing productive members of society to pay yet another subsidy to unproductive (or less productive) members of society. The health sector is already massively redistributive (government pays, directly or indirectly, for 60% of total health costs), and Obama’s plan would probably have only a modest impact in increasing the level of redistribution. But, the underlying problem of cost is not addressed; it is entirely ignored. Yet, this is one of the major threats to our current position as the leading economy in the world—and also one of the principal reasons why median incomes in the U.S. have been flat for 30 years (it has consumed about half the gains that would have been realized through productivity growth).

 

 

Political Psychology

I remember one morning in a seminar class in my last semester of law school having a discussion with my classmates concerning the effect the internet would have on the dissemination of the news. People now have access to vast troves of information and I observed my classmates arguing through variations on what appeared to me to be a touchingly naive underlying consensus that this would result in a more informed populace, one capable of exercising critical judgement as to which resources were most trustworthy and which perspectives could claim the strongest arguments. I argued that in reality most people have neither the time nor the intelligence nor the inclination to play at their game of analytical objectivity--people would simply do what they have always done, only more so given the multiplied options and facility provided by the new medium: they will seek out those news outlets that confirm their prejudices most energetically and emphatically. Since I had thought about this question before, I was able to deliver a brief and fairly coherent and, most important, punctual perspective. That ended the discussion.  

How can one-sided articles like this one:
http://spectator.org/archives/2008/07/16/obamas-left-wing-extremism
be particularly interesting to intelligent people (which is always a minority of the population), even in the rare cases when they string together some good points? All of these editorials (and I do not even except those written by the few authors whom I regularly read), all of them--insult one's intelligence. Instead of confronting all the relevant facts on a given issue, as honor and honesty require, editorialists either misrepresent or ignore the inconvenient facts. For example, the Harvardeer below critiques the Obama health care plan using the usual arguments--but then fails to mention that there are a few problems with the status quo that the republicans are doing nothing to rectify: we spend vastly more than any other nation on our grossly inefficient health care system and we derive little obvious benefit from the huge amount of extra spending we do over and above that of other rich nations. He also fails to note that the government currently pays for 60% of health spending in this country, including tax breaks. Now, I am aware of these inconvenient facts and still oppose nationalization of the health system at this time. Why? Because I believe that we derive tremendous non-obvious benefits from our partly private system. Nationalizing the system would diminish innovation at all levels (which is a double blow because the entire world depends upon our innovation in this field), it would create new socialist-minded voting constituencies (perhaps nurses unions to add to the abominable the teacher's unions), it would further encourage the dependency psychology already too prevalent among certain social groups, it would strike a terrible blow to the ideal of individual liberty, it would make medical care the political plaything of unaccountable bureaucrats and cynical politicians, and, contrary to Democratic propaganda, it might very well intensify the gap between rich and poor--the rich will always have access to private care, which might someday be much better than the public system.

And that's only my criticism of an editorial I fundamentally agree with!

The American Health Care Dilemma

I tend to disfavor universal healthcare for several reasons.  Imposing a government run command and control economy upon the healthcare sector will by definition distort incentives within the system and thereby render it less efficient; also, it will probably increase the corruption which is already pervasive in the Medicaid/Medicare programs and associated health programs. In addition to this inefficiency and corruption, individual liberty and rights will certainly be constrained by the massive bureaucratic machine managing the system. And if private care is squeezed out altogether, as may well happen by one means or another, we will be deprived of a basis for comparing the efficacy of the governmental sector with that of the private sector. I have long assumed that the private health care sector has one other major advantage: it provides a much more fertile soil for all types of innovation, from the development of new procedures to the creation of new pharmaceuticals and the invention of new medical devices--it provides ample rewards to the innovators and sufficient flexibility to experiment with new ideas and opportunities.
 

There are also arguments of consequence that may be set forth for the other side. There is the moral argument that citizens ought to have a right to decent health care provisions regardless of income. Also, certain specific efficiencies can be achieved more readily under a government controlled system than under our hybrid model (esp. more thorough preventive care and a greater emphasis upon it, elimination of private companies' bureaucracies, and reduction of pay for some health workers).  Another substantial advantage, one which sways many intelligent Republicans, is the disburdening of our corporate sector of a major obligation not faced by their international competition--this is a problem which will only worsen without some type of reform in future.
 

As an interim solution I favor raising the age of Medicare eligibility to 70 by 2025. Also, I would impose rationing upon Medicaid recipients and initiate a program to emphasize preventive care. Those in government programs may simply have to accept rationing at some point--otherwise there may be a tax revolt or the possibility of governmental bankruptcy. I think tax deductions for private health care and health insurance costs should also be increased for both corporations and individuals--this to increase our international competitiveness.  I realize this encourages more health care spending as a whole and merely shifts the burden of spending away from the export sector. Already the government pays for 60% of health care costs in this country when tax benefits are accounted for.  But, all of these contingencies are interim and the future of scientific progress cannot be forecast. Probably we will do what we usually do with problems: we will exchange old ones for new ones.