Archive for September 2010

All The Way

September 27, 2010

I think the argument goes this way. The Country can not afford the Obama health care plan and besides it is not the role of government to be in the health care business. Some are quick to add that they want the Government to keep its hands off Medicare. I wonder if these people (who make up a sizeable part of the voting population) have really thought this subject through?

For a moment let’s follow this logic. Let’s eliminate any government role in health care. That means that if your employer provides health care or supplements your expense, the employer must do it without any tax break. Instead his health care costs turn into wages or salary augmentation and become fully taxable to you. How many employers do you think would continue providing health care benefits?

Next, the average person would find that the full cost of buying medical care or buying insurance to provide health care coverage that he or she was paying over $ 500 per month for each person he or she were insuring (a family of four would spend $ 2000 per month). This average amount reflect currently the per capita cost for US health care and are 60-100% more than any other modern country in the world.

In a free market environment, each of us could shop around and buy insurance coverage that better fit our needs. One might buy insurance with co-pays or large deductibles. If one was young and healthy maybe one could find a policy that assumed you would be healthy and charged you less. But there is no free lunch and since nothing was being done to contain and preferrably lowering health care costs, someone else would be paying a lot more for their coverage than the average.

Common sense should bring you to the conclusion that no government involvement must result in a lot more uninsured. And since government was out of health care, the stampede of the uninsured to the ER would be met with barred and protected doors. No entrance signs would greet the unfortunate.

Socially our society would split into the haves and have nots (even more than today). With less money, the current medical delivery system would necessarily need to contract. Doctors would have to make less and hospitals would need to rationalize their services, like any other business. This is an ugly future if left to market forces.

My guess, however, that out of these ashes would rise a new and competitive system. There are enough doctors and hospitial administrators who believe their mission is to heal and protect their patients health. These renegades would form cooperative arrangements with rates that were far more affordable. They would teach and demand preventive health care and they would abandon “fee for service”. These coops would be scattered and it would be difficult for anyone to travel with assurance that medical care would be available in a location they were unfamiliar with. Oh, if there was only some national regulations.

For the rich, there is no issue and never will be. It is the middle class that has to wake up and think about health care. The current system offers no one incentives to drive costs down. Fee for service and relatively speaking cheap health care (though Medicaid or employer support) motivate doctors and hospitals to make as much money as they can, and citizens to avoid any meaningful involvement in their own health care.

So the question is should we go all the way, or is there another way to make sense of health care?

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Where Next?

September 24, 2010

Here is a something to think about. Most media experts have pronounced the Democratic Congressional majorities over (as of this fall’s elections). And while they are not predicting it yet, most hint that President Obama will be a one term President. The Democrats and the President will be swept from power, pundits say, because America does not trust them and believes Republicans can govern better.

Democrats, you know, are allied with unions and minorities. Both of these groups are looking for handouts or at a minimum preferential treatment. And at a time when the American bounty does not seem to be enough to go around, why should anyone vote for a party that wants to give what there is too little of, to someone else?

Fast forward. Republicans will clearly fail to produce on any of their promises. They will succeed in favoring the well to do and the rich, and then tell everyone else this is the land of opportunity and those spoils are available to them if they would only work for it. Republicans might also raise their social policy banners again which will bring two consequences for sure. One, individual Republican congress members will choose to live by a different standard than they preach for everyone else, and will be caught out of step with their words. America’s famous “Independents” will scratch their heads and say this is not what we voted for. What will they do? Where can they go?

Once again there is a unique opportunity to redefine both parties, or even better, to add one or two more. The Democratic coalition of unions and minorities is not working because Democrats cannot make life better for either group. Only a strong and growing economy and the desire by both group members to become educated (skills and book learning) to remain current will change their lot in life. Republican policies and values which feature social values that others must follow or those that claim the founding fathers hold the model of how we should live today are simply out of touch with reality. If left unchecked, Republican policies can make only an ever shrinking pool of followers happy.

The problem we see now is that both parties’ central theme are non-starters.  (For example, the question is not whether some Americans should have health care and others not, it is rather how do we make quality health care affordable for everyone.) If they will not abandon them, then voters must look for a new alternative. From recent history we should expect neither party to act fiscally responsible. Neither party will pro-actively rid themselves of the ethics risk of large campaign donations.

We certainly can understand the need for a strong national security but does spending more than all other countries combined make sense? Health care is harder to understand unless it involves you. What could be wrong with health care systems available in all other modern countries that provide superior outcomes at substantially lower prices? Social security and private pension (including public sector employees) were designed to enable individuals to live in dignity in their post retirement years. What can be wrong with ensuring that funds collected during a persons productive years are invested wisely to later years?

The door is wide open for pragmatism. The door is also wide enough for parties with ideology providing they do not carry social baggage. (Gay marriage, for example, should be a non-issue since (1) the government should have no place in religious matters, and (2) the Constitution already outlaws discrimination).

Where next?

The Pledge

September 23, 2010

The outlook appears gloomy. Unemployment is high, good jobs seem to be no where. Cutbacks and givebacks are bombarding the average American. Congress members say one thing and do another. The 24/7 news entertainment media proclaims President Obama the worst President in history. Republicans appear on the verge of regaining control of both the House and the Senate. What more could there be?

You ask for more, well here it is. The Republican Party has rolled out “The Pledge to America”. This clever document provides almost no details but leads those who want to be lead to the comfort of conservative rhetoric.

The Pledge offers a promise to freeze government hiring, keep the Bush tax cuts, and to repeal the Obama health care reform. Now that is a pledge to run on. That is unless you are someone who has a pre-existing condition or are a recent college graduate and have not found a job yet. For that matter, there is nothing in this pledge that should give anyone unemployed hope that a job will be coming their way. As to the deficit, there is no idea presented on how that might be eliminated unless of course you want to give up your Medicare or deny someone else their Medicaid.

Democrats so far are asking figuratively to be thrown out of office. Democrats continue to remain silent on what history will likely record as noteworthy accomplishments. Rescuing the financial sector and the auto industry was both strategic and job-wise, the right thing to do. Imagine if banks had failed or that retirement plans had gone belly up? The auto industry is even a clearer example where so many other jobs are connected to GM and Chrysler, and had those two failed, Ford would have been in the same position soon after.

Probably the most sinister of the Pledge statements is freezing government hiring. This clearly places the blame for the mess we are in on the backs of government workers. While it is almost certainly true that government operations could be more efficient (less people), the three biggest expenses are Social Security, Medicare/Medicaid, and the Defense Department. The first two involve direct payments (not people related) and the Defense budget is almost always off the radar with Republicans.

The Pledge proposes sound bites that will do nothing for the economy or job creation. It guaranties deficits as far as the eye can see. And worst of all, it pits one group of Americans against another. Par for the course I would say.

Wake Up

September 22, 2010

Do you know anyone who has or had breast cancer, or other serious life threatening disease? Do you know anyone who is unemployed or would like to leave their current job and look for a better one? Do you know anyone who has a son or daughter who recently graduated from college and has not found employment? If you do, you probably know someone who cannot find affordable health insurance or may very possibly find insurance at any price.

These situations have been “fixed” in the health care reform bill that passed earlier this year. While the health reform did not do everything reformers had hoped for, it did offer relief for these cruel and senseless practices. Strangely I do not hear any Democrats campaigning on the virtues of health care reform.

The Democratic strategy is pretty vague. It appears to be to simply stand up and take outlandish slurs from Republicans and simply respond with “that’s not true”. Why don’t they tell people what has changed and why the reforms represent the real American spirit. Why don’t they establish the high ground that there are no conditions (other than outright misrepresentation) for denying health care coverage? Or that insurance companies can no longer charge extremely high rates to some people just because they want to?

If Democrats chose this approach, the shoe would quickly be on the other foot. It would be great to hear John Boehner or Mitch McConnell saying they wanted to deny cancer survivors health care coverage or that unemployed workers should go to the Emergency Room if they wanted coverage for themselves or their children. Boehner and McConnell may not be bad persons but their policies sure create bad situations for too many Americans.

Plan B

September 21, 2010

Previously I have associated the term “plan B” with what do you do when what you want to do does not work? Even the morning after birth control treatment was aptly named plan B. Now there is a new concept associated with plan B but this new application raises unpleasant questions.

Today’s newspapers are carrying a story about the Republican Party’s “plan B” campaign rhetoric. Their “plan A” was to hype the repeal of President Obama’s health care reform. This was catchy and appealed to many of the Republican base and even better to the far right, act now-think later faction. When it became clear there would not be enough votes to overcome a Presidential veto, voila, we need a plan B.

The Republican plan is to gut the bill of certain provisions, each that would seem innocent by itself and therefore might carry a majority and might even be popular enough to overcome a veto. An example might be the provision that requires all businesses to offer health insurance and if they do not, then the business is subject to a special tax. You can hear the cry now. We are taxing our businesses to death. How can we expect new jobs when we tax our businesses so heavily. And so on.

Well if we do not fund health care through payrolls, how do Republicans propose that it be paid for? At the end of the day, employer’s contributions are really tax supported (these costs are tax deductible) and for the most part, are an outright hidden tax where the remaining cost is built into the price of goods and services. What are their ideas?

The most troubling aspect of Plan B is that the discussion is not about health care cost. Further, unwinding the Obama plan will mean denying certain groups of people coverage, either directly or by pricing them out of the market. Health care is not free and should not be viewed as free. The discussion must come around to how do we make basic health care affordable and available (as in all other modern countries)? Sadly, the American voter does not see a con when it is coming right at them.

What A Deal

September 20, 2010

Voters will have a choice on November 2. Rural and conservative types can vote to throw out the bums (mostly Democrats). Urban and progressives can vote to save the Country from the types that got us into the mess we are in now. In either case, no matter which side prevails, voters should have little expectation that anything will change. What a deal!

This sad story begins with the fact that the current state of affairs is a complex mess.

  • The Country has shipped too many jobs overseas without any serious effort to stimulate good replacement jobs. You cannot jump start the economy with Starbucks jobs, and while fat bonuses on Wall Street might help New York City, it does nothing for the rest of the Country.
  • Our educational system has been babysitting too many students for too many years and its output lack drive, knowledge, and skills.
  • Health care is slowly bankrupting the Country and no one seems to worry about why. (Denying someone coverage is not the answer.)
  • Social activists have lost sight of the notion that what they believe may be ok for them, but they have no right to impose it on others. These social activists through their protests have ground the political process to a halt with the left and the right polarized to the extreme.

Like pick up sticks, this puzzle could be unwound. Unfortunately, as soon as the voters elect anyone, that person must begin rewarding their backers, and then prostrating themselves for contributions for the next election.

What a deal…

Starting Point

September 19, 2010

The US has an unspeakable Federal Budget deficit, an enormous and growing National debt, and no political idea how to eliminate them. The question everyone should be asking is why is there no path forward.

The 24/7 media, most of the seasoned politicians, and all of the new eureka (give power back to the people) politicians deal in sound bites. It is a mystery whether any of these sources have a clue to what makes up the federal budget, or how to correct the deficits. Their motivations are so compromised by advertising revenues, campaign contributions, and other spoils available to elected officials. Their combined duty to lead and inform is hopelessly lost behind the sparkle of other people’s money.

But one has to start some place. A recent full page ad in the New York Times, submitted by the Cato Institute, list a way to reduce Government spending in a big way. The Cato people estimate about a $600 billion saving annually. This is a big number and deserves a thoughtful review.

You can view their ideas at http://www.cato.org/downsizing-government/Downsizing-the-Federal-Government.pdf

There are some questionable cuts like turning social security into private accounts (2008 and 2009 showed clearly what can happen) and cutting Medicare and Medicaid without directly attacking the sources of health care costs and increases. Never the less, nature shows us time and again that cutting vegetation back, usually produces thriving fields afterwards.

Progressives will cry foul immediately and claim these cuts will lead to even greater splits between the rich and the poor. But here is an idea.

Let’s agree that the tax table in use during Bill Clinton’s years will be adopted. That is in effect a tax increase for everyone. Now, progressives must offer expenditures cuts that will balance the budget. Do you think there will be any takers?