Wednesday, August 26, 2009

Flexibility will be the Key Ingredient

As we get closer to talking about HOW to address specific Health Care product/service issues, I want to point out that simply overlaying 'what we have' with something else is no guarantee for success. Nor are we guaranteed a REAL solution by moving in the direction of 'adapting' an existing program which is already known to be 'broken' and in need of 'repair'.

I would like to state for the record that, IMHO, the most serious problem we face - in Health Care and most other areas - is the tendency (desire?) to apply 'rigid controls' upon a complex system because 'we don't like the way things are'. Unfortunately, this attitude gets in the way of Addressing The Real Issue system with any Long-Term prospect for success simply because: CHANGE HAPPENS... Whatever we design *must* be able to cope with sociological and political changes that WILL happen in a fluid, modern environment.

Therefore, I submit for our consideration, Ashby's Law aka "The Law of Requisite Variety". It comes from the field of cybernetics and is stated in many ways, one of the simpler (?) versions is something like:

"The variety in the control system must be equal to or larger than the variety of the perturbations in order to achieve control." (And that's one of the simpler ones?)

When you break it down, it simply means that a system (any system) that is flexible, e.g., has many options, is better able to cope with change.

Let's agree with the obvious - no matter where we start or what we propose for Health Care, conditions will change over time. A system that is tightly optimized for an initial set of conditions might be more efficient at the beginning while those conditions prevail - but IT WILL FAIL should (e.g., when) conditions change. And in today's world, conditions change: frequently daily or even on an hourly basis. When you add Human Behavior into the mix, you can be absolutely certain that change (usually unwanted or unanticipated) will occur.

In its original setting of control theory, Ashby's Law focuses on trying to keep a system stable. The more options the program has, the better able it is to deal with fluctuations in the system. Variety of input can only be dealt with by variety of action. This principle is well known to anyone who has played (studied) a non-trivial strategy game. An obvious example is Reversi (aka Othello) where the best strategy for the beginning of the game is counter-intuitive because it emphasises minimising the opponent's options.

For our Health care project, the application of Ashby's Law is obvious. Our (*NEW!*) system absolutely MUST be sufficiently adaptable to cope with a changing environment. A bureaucratic system [shudder] that is too rigid faces potential danger if its environment changes, especially when conditions change rapidly.

Consider the rise of digital photography. Companies that specialize in the production and processing of film are having to adapt and develop new products and services in order to survive.The music industry has had great trouble adapting its business models to the internet - it's old models were excellent for the age of physical goods such as CDs but cannot cope with the system perturbations introduced by the existence of downloaded digital music.

These Real World business examples show why in the long term innovation and creativity are essential for success in any complex enterprise (which Health Care certainly qualifies). Encouraging a creative environment means taking some risks, of course. A rigid environment that stifles innovation is effectively storing up greater risks for the future.

Short form: Our system needs OPTIONS. Lots of them. Which means functional checks-and-balances and periodic reviews are critical - things which stop working must be re-engineered or DISCARDED.

Therefore, IMHO, that means we must *carefully* address developing a system with both public and private segments, each designed and implemented in consideration of the other, with flexibility of individual choice (and its associated individual responsibility/accountability) as the ultimate goal in both arenas.

It doesn't mean we must address everything on the table at once. Nor does it guarantee what we develop will be 'perfect' or 'ideal' or 'do everything' - which is a typically matter of personal preference and desires, anyway. But *if* we start from a logical position, ignore ideology wherever possible, carefully prioritize what we can and cannot do, address the issues in priority order (even if it mean some highly desirable features must wait), while building in the flexibility to adapt to changing conditions while also expanding the program over time, then we *might* have some reasonable hope for success.

Whew! That will not easy, to be sure - but I still believe it's possible... Provided we don't let the past be a straight-jacket for our thought processes.

Just some food for thought...

- Steve

Tuesday, August 25, 2009

Prescription Drugs Reply


Not to rain on your parade, but *our* program - clearly still in development - does not HAVE a "Medicare Prescription Drug, Improvement and Modernization Act". (It doesn't have Medicare, Medicaid, and any other politically 'sacred cows', for that matter.)

Thus, applying our valuable time arguing about which party did what-when-where, how much it cost, and who voted for or against such-and-such is a Waste Of Time (other than for making sure we don't repeat the same implementation mistakes in our New Approach). Yes, you and I could point out this or that ideological point ad infinitum - but that doesn't get us anywhere, does it? And isn't that EXACTLY what both of us accuse the current self-appointed ruler of Both Parties of doing? They pontificate about endless and frequently meaningless details and attempts to satisfy their respective power-bases and they are *not* devoting very much statesmen-like effort to ADDRESSING THE PROBLEM! And even when they *do* try, they fail to consider the Unintended Consequences adequately.

As much as I would enjoy the diatribes that would result from each of us chasing those oh-so-tempting ideological rabbits, I am struggling to set such things aside. Instead, I'd like to focus on reaching a genuine, truly-non-partisan compromise - one that has less to do with ideology and more to do with providing the actual products & services for people that are truly in need.

That said, I appreciate your acknowledgment of the HUGE costs associated with the R&D efforts to bring these new wonder drugs to market. Many pundits and 'reform advocates' fail to recognize how things work in the Real World at all. The free-enterprise system has been directly responsible in ways too many to count for making that happen. Those companies and individuals took the risk and I - for one, apparently - have no problem with them charging all the market will bear. For every successful drug there are dozens of failures and those R&D costs must be recovered somehow or there is no reason for businesses to work on finding new ones.

That's not to say that I - yes, your humble resident conservative - do not have issues with the drug companies. I do. For example: I don't like private companies getting government funding and other subsidies to do R&D when the government doesn't get an ROI on it's investment (tax breaks are a different beast). Conversely, I don't like government putting unnecessary, bureaucratic road-blocks to R&D and then ignoring the increased cost those regulations cause. I think drug patent protections are too long in some cases, not long enough in others (the problem here is one-size-fits-none: a new headache remedy is not on the same level as a new cancer drug). I don't like government *not* doing honest negotiations with the end-user in mind (e.g., patient *and* taxpayer) for products and services. I don't like the lack of protection on legitimate patents in the international arena. And so on, and so on...

But these are problems in how it's been done in the past. Are they real issues? Yes, of course. Do we have all the answers? No, we don't (at least; not yet). Yes, the devil is in the details, and we'll get to them.

To avoid future confusion on my comment, re-consider the phrasing of your original point:

9. Provide universal access to low cost, generic medicines.

My Point: I am concerned with that "universal access" phrase. Historically, it almost always gets translated to "confiscate". THAT is the issue I'm raising. There must be adequate protections for developers of goods and services as well as the consumer. Drugs do not start as a "generic", nor should they. But once the patent period has expired - which should be tied to some reasonable recovery of all R&D expenses - THEN a drug can become a 'generic' and the future cost savings are from being tied to the actual production cost of the drug itself.

Commercial Freedom demands that there *must* be a reasonable prospect for profit - which is NOT a 'dirty word' - in the research and creation phases for new drugs and treatments (in all phases, actually). It is the prospect of personal profit based on one's efforts that is the powerful mechanism which drives commerce and many forms of human behavior. This is a good thing, since I, for one, am not interested in being stuck with what we have now (or retreating back to the point of using leeches).

I called "universal access" a sound bite because it's main purpose is to 'sound good' to the Great Unwashed (thus generating popular support), while having no clearly defined meaning for how it gets accomplished, and which all too easily gets translated into, "I want it and *my* government will *force* you to GIVE it to me." Sorry, that philosophy is Wrong.

Let's re-establish Unavoidable Rule #1 - Everything has a cost: TANSTAAFL.

So, let us agree to set aside the ideological arguments you raised about MMA - I agree with many of your points - because such a beast doesn't exist in our plan and we know better than to try it again. As such, my original comments and concerns on #9 and #10 are reasonably valid - simply pointing out topics we must consider when we get to the implementation phase. Among the things we must address at that time will include defining the appropriate mechanisms to encourage and reward Positive Behaviors such as Responsible Planning, Assuming Personal Responsibility even-when-consequences-are-life-threatening, etc., while simultaneously discouraging the negative actions and minimizing Unintended Consequences. (The key word in that sentence is appropriate.) Now, THAT is where the Real Challenge comes into play.

BTW - If there is a True Need to "reform Health care" in this country, then by all means, let's *really* start over from Ground Zero... That means we haven't *saved* anything yet, because we're still trying to define the budget for what we WILL spend. Once that is done, *THEN* we get to prioritize HOW we will spend those funds and on WHAT products and services will be provided... This task cannot be easy, or they would not need people of our caliber to do it...

*sigh* - We have a LONG way to go.

- Steve

Sunday, August 23, 2009

Prescription Drugs


As a follow on to my previous post, where I stipulated that a restructuring of government health care spending must be accompanied by health care reform which results in substantial savings, in this post I'm going to take up prescription drugs.

Here are the relevant goals we are starting with, and your comments:

9. Provide universal access to low cost, generic medicines.
"- Sound bite. You cannot FORCE a business to supply any product to government at a lower cost than is available to private (FAIRNESS). Also - Cannot mandate/ dictate price (value) of a product, especially when FDA makes it so hard to approve a new drug. see #10."

10. Allow the federal government to shop - and bargain for - the lowest cost prescription treatments.
"- same as #9, They already can, and do. But price controls DO NOT WORK. Remember how market forces operate in the Real World (e.g., Adam Smith)."

Begging your pardon but these are not sound bites.

Most people don't understand the hows and whys of price differences between proprietary and generic drugs. Here's a short primer:

When a pharmaceutical company develops a new drug they obtain a patent which allows them to market the drug exclusively for 20 years, basically at whatever price they want. Following the issuance of a patent, clinical trials are conducted according to a fairly rigorous set of guidelines designed to insure safety and effectiveness. At the close of the clinical trials and assuming they are positive, the FDA then approves the drug for sale.

Because the trials can take a rather long time, this limits the time drug companies have to recover expenses and earn profits before the patent expires. Some estimates put the average interval at around 7 years (later on in this post however I'm going to talk about "Singulair", approved by the FDA in 2000 and the patent for which does not expire until 2012). After the expiration of the patent, other companies can market generic equivalents at greatly reduced prices. Drug companies have long argued that because the clinical trials absorb so much of the 20 year patent there remains insufficient time to recover costs. Frankly, this is baloney. U.S. Drug companies have always been among the most reliably profitable companies in the world and have remained so even during this recession.

Let's look at the impact this process has in the real world.

The World Health Organization rates the comparative effectiveness of health care in different countries. Some critics of the WHO rating system claim that the U.S. is the unquestioned leader in the development of new medicines, precisely because pharmaceutical companies in this country have greater incentives to invest in R&D than they do elsewhere. Other countries which do not have the pharmaceutical establishments we have here "piggyback" on the costly initiatives of U.S. companies and only pay for generic equivalents when they come available. For example, critics point to England's National Institute for Health and Clinical Excellence (NICE), which limits British NHS (health care) spending on certain drugs deemed to be less cost effective, i.e.: drugs which may be effective, but are still in the patent "window" and therefore available only at extremely high prices. Is this criticism accurate?

No, no it isn't. And demonstrably so by measure of pure common sense. Sometimes I wish all the horror stories about rationing of health care in other countries were subjected to simple, easily accessible, God given common sense. In a recent, and rather stupid Wall Street Journal opinion piece, NICE was savaged for refusing to pay for, among other things, the drug "Sutent", which does not cure cancer but may prolong the life of some cancer sufferers. "Sutent" is one of the world's most costly drugs, and chastising NICE for not paying for it is not only disingenuous, but against common sense. Stay with me here. Any system which proposes to provide health care for all citizens is going to have to make difficult choices on how health care resources are allocated. But here's the kicker: in the U.S., private insurance providers commonly refuse to pay for Sutent also. Furthermore, there is no law in England, or anywhere else for that matter, which prevents those in need of Sudent from buying it with their own money, just as they can and perhaps sometimes do here in the U.S. So all this bulls**t about rationing usually breaks down when you ask the mere question: "Compared to what?" Moving on...

In 2003, a Republican dominated congress passed along party lines one of the most fiscally irresponsible pieces of legislation ever. It was a bill which, by fiat, unnecessarily transferred billions of our tax dollars to private companies. How exactly does that square with your elementary tenet that citizens of this country are tyrannized when they are forced, by law, to pay for benefits which they themselves are not allowed to chose? Let me say this again: Republicans voted for the bill, Democrats voted against it.

The bill was The Medicare Prescription Drug, Improvement and Modernization Act (MMA), passed and signed into law by George Bush on December 8th, 2003. If you ever wanted a story about how not to pursue health care reform, just take a moment to read about this act. And, if only because the passage of this act was such a monumental tribute to government waste, I can't resist adding that if Republicans today are going to posture their opposition to health care reform as fiscally responsible, how are they to explain their own party's disastrous record? A brief summary:

As you probably know by now, the MMA added a generous new prescription drug entitlement (don't you hate that word?) for recipients of Medicare. The original ten year cost estimate submitted by the White House was around 400 billion dollars. Immediately after passage, the estimate was raised to 532 billion. By 2005, the figure had climbed to a whopping 1.2 trillion dollars. Steve, that's 120 billion dollar a year, which comes to about 20 billion more than the entire annual budget for the U.S. Department of Education. And remember, it was a benefit manufactured out of whole cloth as a brand new entitlement. How could the original estimates have been so far off base? Well, we are learning today that the estimate of 400 billion was known by the White House to be far short of the actual cost, and was deliberately shaved to insure the support of conservative voters in Congress.

Now back to points 9 and 10, and your comments:

"They already can, and do (negotiate prescription drug prices)". No they don't. The MMA specifically prohibits Medicare from negotiating for discounts on prescription drugs.

"But price controls DO NOT WORK. Remember how market forces operate in the Real World (e.g., Adam Smith)". Possibly. But we're not talking about price controls here. In the real world you are referring to, consumer choice and competition drive prices down. Fair enough. But in this case, the MMA specifically bars government from making the same kind of choices on prescription drugs which you yourself advocate are crucial to the proper functioning of a free market.

So, according to points 9 and 10, how much money can government actually save by amending the MMA to allow for (fair) price negotiation? Well, other federal agencies, like the VA, the Department of Defense and the Bureau of Prisons to name a few, are allowed to negotiate discounts. Accordingly it has been estimated that these agencies buy prescription drugs at an average of 48% less than Medicare does.

Now for some simple math. If we keep Medicare's prescription drug benefit, but allow for price negotiation at a savings of 48%, this would result in reducing the 10 year estimated cost of the program from 1.2 trillion to 624 billion, or a savings of around 57 billion one-spots a year. Hardly peanuts...

Now let's tie some of this together.

Two of the most common talking points we are hearing today, starting with Republicans in Congress and proceeding to the so called "Tea Baggers", is that the public option is too expensive and government is particularly unfit to run it. Let's bask for a moment in the amazing irony of this. In 2003, Republicans thought so little of government's ability to run a health care program that they gave 1.2 trillion dollars to Medicare: a government run health care program! Steve, these are the same clowns who today are complaining that government (their's) ought not to be entrusted with so much as a bottle of Advil. And: too expensive? Lord preserve us from these idiots. They are the very same ones who help make it too expensive! Heck, with my dinky little computer and a smidge of common sense, I just managed to save government 57 billion dollars a year. Suddenly it occurs to me why these nut jobs are so scared of death panels, since by any reasonable measure such a panel would have no choice but to declare them officially brain dead. By the way that popping sound in the background is my chutzpah detector blowing a fuse. Here's a personal anecdote:

Recently while Jane was between teaching jobs, she found herself out of "Singulair" and not covered by either her previous or future employer's health insurance. But when she tried to buy it on her own at the pharmacy, she found a month's supply would cost $400.00. Bear in mind, this was the same drug she had been accustomed to paying for with only $50.00 out of pocket to cover the co-pay. So I got on line, did a little snooping and found a drug company - in Canada of all places - which would ship us a month's supply of Montelukast, a generic version of Singulair, for about $75.00. I asked myself, is Montelukast really the same thing as Singulair? You bet it is. As a matter of fact, another way of looking at it is that Singulair is actually the generic version of Montelukast.

Now Singulair is a pretty big deal for Merck, it's patent holder, since it accounts for one sixth of Merck's annual revenue. But why is it so much cheaper to buy in Canada? Well maybe part of the answer lies in the fact that the "Mont" in Montelukast stands for "Montreal" - where this highly popular drug was originally developed. Now unless they have moved it recently, Montreal is in Canada - that is, the very same country which people are supposed to be streaming out of (as the critics tell us) and into this one, presumably so they can pay $400.00 here for the same drug they can buy back home for $75.00.

If you have time, go here for an interactive list of the world's 20 largest pharmaceutical companies. Among other factors, you can prioritize the list by revenue, R&D expenses and net income. Try as you might, you aren't going to find any consistant correlation between these numbers. Do American based pharmaceutical companies generally invest more in R&D than the international average? Nope.

In due course we will return to Big PhRMA to see if we can squeeze out a little more savings than the paltry 57 bil we bagged on this first turkey shoot. In the process we will probably find as many liberal political hands in the cookie jar as we do conservatives. You can mince up the Libs while I bang away at the Baggers... Deal?


Wednesday, August 19, 2009

Basic Coverage


Some time ago, in a previous debate, I offered that a possible solution would be to simply expand Medicare to cover all citizens. Looking back on our list of goals, I now think this idea is probably the best framework on which to construct a workable system which includes both private and public options.

Go here for a fairly comprehensive review of U.S. health care costs, performance and proposed changes. From that site, we find that a little over 46% of all health care spending in the U.S. is accounted for by government. Despite the fact that the CATO Institute generally opposes reform, they do agree with that percentage:

It has occurred to me that if spending per capita in the U.S. is roughly double what it is in other developed countries, then 46% (which works out to 7.5% of GNP) of that spending should be sufficient to provide basic health care for every citizen in the U.S., assuming of course that this change in spending is accompanied by a number of overall decreases in health care costs.

So, in order to get the ball rolling, here is one possible strategy:

1. Calculate the entire amount currently spent at the state and
federal levels on all forms of health care.
2. Divide this sum by the total population to arrive at individual
health care accounts (IHCA's) per person.
3. Adjust the IHCA's against actuarial data for various age groups.
Older populations would generally have much higher IHCA's than
younger populations.
4. Every citizen would then receive a Medicare identity card which
would be used to track spending against their IHCA.
5. Automatic enrollment in Medicare would then entitle every citizen
to Medicare's overall system of health care. Choices on doctors,
hospitals, etc. would be limited to Medicare's schedule of approved
doctors and facilities.
6. Citizens who annually spend more than their IHCA would
incur"deficits", subject to repayment according to
a schedule to be determined.
7. Citizens who annually spend less than their IHCA would recieve
half of the savings in the form of a tax rebate.
8. Citizens can use their IHCA to purchase private health insurance.

Now the concept of health care reform in this country generally embraces two issues: First, universal coverage, and second, lowering overall costs. This post addresses Item #1 in my suggested list of goals: "Provide a reasonable level of health care for every American citizen".

What do you think?


Thursday, August 13, 2009

More ideas to consider for our List of Goals

18. Remove *all* current legal obstacles which inhibit the creation and access to high-deductible health insurance plans and health savings accounts (HSAs).
This will provide additional access to cost-effective choices and options UNDER THE CONTROL OF THE CONSUMER to aid in their self-management of available insurance proposals.

19. Make the ACTUAL medical billing costs - regardless of WHO PAYS THE BILL - transparent so consumers can understand *exactly* what their health-care services and treatments cost. The idea here is to assist with the creation of INFORMED consumers so they can take an active (not passive) role in selecting / managing their own care. This reporting should not be limited to after-the-fact billing. There should be a provision for non-immediate treatments (and "optional" ones, which are not necessarily the same thing) to have a disclosure of the expected costs of the various options available. While I am certain any option with the greater chance of success will *always* be chosen, there are frequent situations where the costs of doing things in a particular sequence vary with little/no impact on the expected results.

20. Provide a mechanism which will enable people to easily make a *voluntary* and tax-deductible donation to assist people who have no insurance and aren't covered by Medicare, Medicaid or SCHIP. This should be an attractive option for those who are truly concerned about the health care 'for those in need'.

It goes without saying that w
hatever system we devise - either the rational one we are working on to Directly Address the issue; or the "let's turn it over to someone else" approach - it is essential that they be financially responsible, and that we have the freedom to choose doctors and the health-care services that best suit our own unique set of lifestyle choices. We are all responsible for our own lives and our own health. We should take that responsibility very seriously and use our freedom to make wise lifestyle choices that will protect our health. Doing so will enrich our lives and will help create a vibrant and sustainable American society. Clearly, the government cannot FORCE free individual to "do the Right Thing", but those funding the system (i.e., taxpayers) should not be in the position of supporting (rewarding) those same self-destructive habits.

More to come.

- Steve

Wednesday, August 12, 2009

Venting Heals The Spirit


First, a little housekeeping...

I don't believe government can always do things better than private citizens. Also I have no trouble understanding what happens when private citizens cede to government the authority to control important aspects of their lives. I've already said that although much of the anti-reform movement is characterized by distortions and outright lies, at the heart of it is a genuine fear that government is going to use health care as a way of gaining power at the expense of personal liberties.

I could spend this entire post dwelling on the whacked out paranoia coming from the far right. But I would rather ignore this kind of stupid, unhelpful rhetoric and concentrate on this actual nugget of truth. But consider:

A grocery store is a virtual testament to much of what government does right. We trust that the meats we buy there are fresh and free of disease. We hardly think to ask if a 16 ounce box of cereal actually has 16 ounces of cereal in it. We shop the pharmacy section and never wonder if it is filled with useless and ineffective "patent remedies". We don't have to worry if the fruits and vegetables are covered up with banned, carcinogenic insecticides. In a larger sense, all of these great things happen because somewhere along the line, private citizens ceded to government the authority to safeguard our food and drugs. And it worked.

But, does the success of the USDA indicate we should cede to government the authority to regulate health care? Well, frankly, we already have. About half of all direct spending on health care per capita in this country is accounted for by government. I daresay that most, if not all of those currently protesting against "socialized medicine" would not have health care at all if it weren't for the U.S. Government. Government also subsidizes and regulates health care in a thousand other diverse ways from education to practice. So perhaps the question we ought to be addressing is not how much government should participate in health care, but how we can make government a more effective partner.

The Jerry Pournelle piece does expose some sobering truths. Like it or not, we live in a country where certain social inequities are not only inevitable, but comprise much of the driving force behind our ultimate prosperity. That said, I'm a little irritated by his suave presumption that the current health care reform bills in Congress are somehow defective because they were, according to his judgement, hastily prepared and riddled with unnecessary attachments: a presumption for which he apparently considers himself above the tedious unpleasantry of supporting with facts. Doggonit Steve, Mr. Pournelle himself points out that health care reform has been an issue since HillaryCare, which raised its head a full sixteen years ago. Isn't that enough time for our elected representatives to have mulled this over and arrived at some kind of workable solutions? And if it hasn't been enough time, what sage will determine for us how much longer we will have to wait. Mr. Pournelle?

Well I'm pretty much done with the venting for now. I really don't want to combine points #6 and 7, since, concerning diagnostics, I intended to go way beyond mere record keeping. Let's keep them separate for now. This leaves us with a full 17 points and me way behind in commenting on each. I'll start working on that right away and have something in a day or two. We're probably both going to get nicked up on this but it will be fascinating to see if we can arrive at a workable compromise.

Oh by the way, it is probable we have differences on the issue of abortion. As a matter of fact, I was three quarters done with a post on that very subject before you rounded me up to participate in this Higher Calling. In any case, I hope this doesn't sound cavalier, but regardless of one's morality or religion, in almost all cases abortion is elective surgery - different in scale perhaps but no different in principle from any other optional procedure. The waters get a lot murkier in cases of rape or incest. Yet if it transpired that government would pay the cost of abortion in these cases, I hardly think the victim should have to undergo enforced sterilization on top of it. For these reasons I don't see abortion as something we should concern ourselves with in the context of health care reform in any case. More, later...


Jerry Pournelle: The Health Care Debate

I think this is an interesting perspective and worthy of consideration. He presents several hurdles we must to overcome with our plan.

- Steve


The Health Care Debate

The health care "debate" has become frantic, which probably means that it will fail just as Hillary-care failed. It's just as well. Whatever one thinks about the obligations of the society to provide "health care" -- and the definition of that term is probably the key issue -- it's pretty clear that it isn't going to be solved by rushing things through. When the Clintons tackled this problem they tried to assemble a brains trust to come up with a comprehensive scheme. That didn't work, but at least there was a unified plan. Handing this problem to the rapacious wolves in Congress and telling everyone to rush along, pass enormous and complex laws with provisions stuck in by anyone who can manage to get into the room, is almost certainly not the proper way to allocate 15% and more of the Gross National Product.

The "debate" will go on, and get even more rancorous; it's not over. It will probably fail this time, but even that's not assured; and the hydra will be back another time. There are too many people who "feel" for those without health care, and who haven't thought a lot about the consequences of the various plans.

One problem is that definition of "health care". There's another problem with the notion of "insurance." The demand for a free good is infinite: you can't just say "everyone is entitled to health care without limit." There is no end to what one can do with enough money. If a study shows that having a private room with 24/7 professional nursing care gives one a better survival chance -- as it almost certainly will -- there will be no lack of lawyers willing to sue on behalf of the poor and homeless demanding that if anyone gets that kind of attention (even if they pay for it themselves) then everyone ought to have it. If a kidney transplant is good for the rich, is not everyone entitled to it? What about pacemakers? What about new procedures? Universal health care without limit is a free good which will generate infinite demand. There have to be limits.

How are those to be set?

Free people are not equal and equal people are not free: if I cannot spend more on health care than you even though I have the money, that is a limit to my freedom and liberty; but if I can, then that is an infringement of equality. If I can't afford it, why should you have it? The pressure is toward equality over freedom in matters of health and life. Without infinite resources this conflict is inevitable.

As to insurance, think about the notion that there is to be no exclusion or increase in premiums for pre-existing conditions (that seems to be common to all the proposed plans). Obviously under that situation the optimum strategy is to keep your money until you get some catastrophic disease, then rush out to buy insurance.

The solution to that, we are told, is to require that everyone buys insurance. That creates the pool from which payments will be made. The pool will be finite: there is sure to be more demand than the pool can cover (at least it has always been that way, and we've been shown no counter-examples). That means limits -- rationing. How will that rationing be accomplished? By whom? Using what criteria? Will we forbid some highly expensive procedures? If not, who gets them and who does not? Those are complex questions, and rushing in to pass a bill that hires a bureaucracy to figure it out is probably not the solution. From all evidence, bureaucrats will work for their own benefit first, then that of their clients -- nearly every bureaucracy that ever existed has worked that way, so why should this one be different?

So there we are. When there's a real plan with real answers and mechanisms (as opposed to a set of goals and hopes) we can consider it. Will most of us be better off under it than we are now? It is certain that SOME will be better off under the various proposals, but who and how many isn't anywhere near obvious until we have an actual proposal in hand. It may be that most of the middle class will be worse off for the benefit of the poor and homeless (and the bureaucracy). We can then decide. But surely it will be better to know just who benefits, and how, and what the costs will be?

Tuesday, August 11, 2009

Hooray... A Good Start!

Thanks for bringing us back to a PROPER starting point: establishing the GOALS *before* we get wrapped up in HOW to do things. Excellent.

A few general comments - just to keep the conflict in our positions alive and well...

BTW - Just what definition of "universal" are you using, anyway? As a synonym for "FREE"? (TANSTAAFL.)

"there are some activities which private citizens, either in groups or individually, cannot be expected to perform in the fair and comprehensive ways which government can."
- C'mon, Chris. This is a sound bite. "Fair?" Who Decides what is 'fair'? "Comprehensive?" Who decides how far to go and what happens when you reach that Real World limitation? And how do you guarantee government will actually DO what they are supposed to do? I'll put the Education Establishment up as an example of government not getting CLOSE to 'reasonable expectations' for performance. What makes one think they will do better with Health Care (1/7th of the economy)?

"You can take all the blather about government controlling 'who lives or dies', roll it in a ball and drop it off a cliff for all I care."
- Sure. And I wholeheartedly agree... As long as government doesn't try to make and enforce those very decisions you're talking about. Some of the policies being proposed do NOT require a Huge Leap to get to that point, IMHO. As an aside, it would appear you trust the 'inherent goodness' of a powerful bureaucracy NOT to do something that... I think their historical performance warrants a reasonable distrust of ANYONE holding such power, regardless of their stated 'intentions'. BTW, why does it seem like you generally see some aspect of 'Good Intentions' as ALWAYS residing in the deeds of bureaucrats, but NOT being present in similarly-motivated actions of private individuals? Question: Is the U.S. a Great Country because of the actions of its Government, or because of the actions of its citizens? (No, the answer is not BOTH - Hint: who "derives" their power from who?) Hmmmm.

"...disadvantaged citizens being universally referred to as deadbeats and social parasites."
- People generalize, frequently when they shouldn't. (I just did so, above. ;-) ) Please continue to be gracious and seek to understand the principle behind the comment instead of focusing on the inaccuracies of the generalization and use that inaccuracy to discard the comment as a whole. I know very few people that consider the Truly Disadvantaged to be 'deadbeats'. I, and most others (even well-known arch-conservatives!), will not hesitate when it is appropriate and possible to give a hand up to someone trying to better themselves or their situation. However, it is the people who make - and continue to make - poor decisions and expect OTHERS to assume the (financial) burden resulting from those Bad Decisions that are 'Parasites'. Give me another equally descriptive adjective, and I'll use it. But changing the label doesn't change who/what they are. This goes DIRECTLY to my point about "The demand for a Free Good or Service is UNLIMITED". Sorry.

"I see no reason to humiliate, through a system of odious penalties, those who lack the ability to pay their fair share. But why not offer them some honest and honorable means to do so?"
- Sure. I proposed it - it's called Public Service, usually doing an otherwise distasteful task or position. It's only 'humiliation' if one accepts it as such. It is just as accurate to see it as a means to show your appreciation for the (undeserved? unearned?) help you received when you were in need. It's all about Perspective. And there *is* a Real Cost for such a program: what is ethically wrong with asking those who are reasonably deemed capable of paying for the services received to be legally obligated to do so after the fact? There is a HUGE difference between honest acknowledgment of receiving charity and the claim - as your 'RIGHT' - to goods services which must be provided by another through their direct efforts. 'Rights' are granted by God and are typically intangible things. Accepting the philosophy of being "my brother's keeper" is by MY CHOICE and does not - repeat *NOT* - confer or grant a 'RIGHT' to 'my brother' to make DEMANDS upon me as HE sees fit. Any government that seeks to FORCE adherence to a arbitrary standard of 'providing for others' is WRONG.

"America spends at least twice as much per capita on health care as any other industrialized nation, and yet by no objective measure do we outperform these other countries."
- *SIGH* --- I'd *really* like to see an honest, unbiased evaluation of world programs that hold EACH system to the EXACT same criteria, including: Quality of Life, Life expectancy, Available treatments, treatment scheduling, patient/doctor satisfaction. In-country education training. Bureaucracy compliance costs (bookkeeping overhead). Birth survival rates. Access to the latest medical procedures and equipment. Extent and length of Real Rationing (whether by bureaucratic fiat or by private company policy). Taxpayer costs and function of GDP. Health care costs as function of Tax revenue. Etc., etc., etc... I'm not saying that study is not out there, but I haven't found it (yet). It seems like every 'study' starts with a desired result in mind and manipulates the available data to fit the pre-ordained opinion. And either side can 'prove' anything by cherry-picking the statistics which support a particular position... Sorta like the AGW argument. [zing!] +:-)

"It follows that we have the resources to provide universal health care, but the system we have is not particularly good at distributing them."
- Careful... That same logic could indicate we should not supply foodstock to other countries as long as one person is "going hungry at home". I could point out you're making the same kind of far-reaching generalization you complained about earlier in a different context. "Provide"? Sure, theoretically. But WHO will pay for it? So... I must respectfully disagree. I think we 'distribute' care pretty well, all things considered. The complaint is that no one wants to pay for it. (We can agree that costs are somewhat out of control, too... That's what we're trying to fix, by changing carefully targeted aspects of the system operates.)

* * * * *
OK, Now that we've got that out of the way (indulging my narrow-minded viewpoint; I feel better!)... Let's set most of the ideology aside and get back on the right track...
* * * * *

I like your list! Let's use it as our new starting point. Naturally, I have a few more points to add. Maybe some editing, too. There are some caveats (sub-points) we need to put in place as we head toward developing proposals to actually DO these things. Remember: TANSTAAFL! My comments, point-by-point...

1. Provide a reasonable level of health care for every American citizen.
- Sorry, this is just a Sound Bite. The key question is WHO DECIDES what is "reasonable"? [Cue the slippery slope.] This is where we will get in trouble: WHO decides what is "available" and what must be "provided" (and paid-for by WHO). If we're going to seriously keep this bullet point on the list, let's think HARD about what it *really* means. Seriously. Otherwise, its just a 'feel-good' statement without true meaning.

2. Develop a health maintenance program with built in incentives to encourage healthy lifestyles.
- Sure. (But almost a pure Sound Bite, however.) The inherent Incentives exist anyway. It's forcing or "mandating" adherence to those a program (defined by "WHO"?) that concerns me. Is it in one's Best Interest to take actions to stay healthy? Of course. But I dislike using FORCE to insure compliance. You know that I dislike giving bureaucrats the authority to insist on a particular practice or procedure "for your own good". Supposedly, systems like Canada has many options and incentives – which are not used – either because of Real World availability (waiting lists, rationing) or the simple desire to just NOT DO IT.

3. Allow for private options.
- 100% agreement. My biggest concern is 'limitations' or 'requirements' (generally defined and enforced by state and local agencies) that mandate specific coverages, etc. My sub-points: (a) insurance policies are attached to the individual, not the employer, (b) any company may offer a policy to anyone, regardless of
previous medical condition or residence, etc. (c) no 'required' or mandated coverages of ANY kind. CHOICE prevails. See my original notes - More to come, I'm sure.

4. Protect all citizens from the high cost of catastrophic illness or accidents.
- Sound Bite. WHO DECIDES how much 'protection' is provided and what services are required? We have high-deductible policies available now for this very purpose. They seem to work just fine; they just have to be paid for. I don't see how complete government coverage is going to work, especially since this is where huge costs exist, by definition. A good place for personal CHOICE and accountability.
Again: Actions (or inactions) have consequences - and that means the consequences might be dire on a personal level. Good Risk management evaluation can be taught to those who recognize the value, but cannot be forced into existence.

5. Reform the health industry "from the ground up" to increase the number and and quality of health care professionals.
- Sound Bite. You don't fire everyone at General Electric and start over because the secretarial pool is getting thin... As for increasing available staff professionals - this is an "education and training" issue. I proposed government financing of training being 'paid back' by a period of public service. Start there. What else can we do, anyway?

6. Engineer a universal system of electronic patient record keeping.
- Agreed. It's been suggested for years. Why isn't this a key (STARTING) component of any legislation? Treat it as a properly run DOD project (rare, but they exist).
Open it to bid with no pre-conditions (union labor, racial makeup of company ownership, etc.). Penalities for cost overruns to bidder, not taxpayer - build it and get out: this isn't a long-term funding project.

7. Engineer an accessible system of computer based diagnostics.
- See #6. Obviously part of record keeping system.

8. Review and reform tort law with the following goals:
A: No citizen is denied legal remedy for injuries from malpractice.
B: Lawyers who pursue cases deemed to be frivolous are liable for
censure, penalties and court costs.
C: Allow for actual damages but restrict "punitive" damages.
D: Criminalize certain acts of malpractice and negligence which are
presently the subject of civil suits only.
- I made a few proposals in my original note, and I really like the details you've provided here. But I think we're still leaving some things out. A good start. Let's keep working on this one.

9. Provide universal access to low cost, generic medicines.
- Sound bite. You cannot FORCE a business to supply any product to government at a lower cost than is available to private (FAIRNESS). Also - Cannot mandate/ dictate price (value) of a product, especially when FDA makes it so hard to approve a new drug. see #10.

10. Allow the federal government to shop - and bargain for - the lowest cost prescription treatments.
- same as #9, They already can, and do. But price controls DO NOT WORK. Remember how market forces operate in the Real World (e.g., Adam Smith).

11. The cost of elective treatments, i.e., cosmetic surgery, will be paid entirely by private citizens.
- A Very Good idea, and while I agree on the surface, WHO DECIDES what procedures are considered 'elective'? What about new drugs and treatments? for cancer, What about Abortion? (a *real* sticky issue) What happens when a psychaitrist insists that a young girl's "sense of self and her self-image" requires she get a nose job? Or this exotic dancer needs a boob job to enhance her career? Once you establish a specific class of medical procedures as being NOT COVERED, you open up a Pandora's Box. "Here Be Dragons..." That's why we *MUST* limit government-supplied services to legitmate critical care for those truly in need; not "universal care" for whoever wants it (or can convince a bureaucrat its a good idea). Let the private system cover ALL private issues from the beginning.
Seriously, I *do* like this point, but it WILL end up being trickier than it looks...

* * * * *
* * * * *

12. After receiving treatments at government expense, reasonable processes to recover those costs must be made via payroll deductions, etc. If necessary, mandated 'public service' to recover expenses. TANSTAAFL.

13. Care is intended for U.S. citizens FIRST. Reasonable steps taken to recover costs and/or expell non-citizens who receive care at U.S. facilities. See my proposals: Harsh? Take care of your own first.

14. Immediate (drastic) improvements in FDA procedures and policies to speed-up the process of clinical trials and other costs associated with bringing new drugs and treatments to market. Obvious.

15. Massive paperwork changes (simplification and standardization?) of record keeping requirements required for government programs: Medicare/Medicaid (see #6).

16. *All* government employees and electied officals *must* participate in this system. Any "special programs" or "special consideration" for non-=critical care (especially for elected officals) are hereby abolished. Possible Exception: Executive branch; but let's think about it.

17. Yes, I'm going to bring up the Sterilization Issue again for government-funded birth and abortion expenses. Yes, it's harsh [shudder}. Honestly, I don't like it. But it seems necessary to prevent abuse of the system. Again: Actions have consequences, and you know them ahead of time. Sorry.

(BTW, let's consider combining 6+7 and 9+10. Maybe add 15 as a sub-point to 6+7. Yes, I know 12, 13, and 17 are serious, tricky, and marginally-offensive to some, but I think they are important in principle and should be tracked separately. Think about it and let's review later.)

* * * * *
* * * * *

I still believe a better approach is to have the Government become a provider of SERVICES instead of being a source of FUNDING. Please re-review my approach to expanding (fixing) the VA hospital system. (If government cannot fix that, which they already control, can they fix anything?) Competition is a Good Thing, and government can meet the legitimate health care needs by being an alternative provider. This concept has a possibility of reducing over-all system costs by moving (non-critical) indigent care - we need another adjective - out of the private system. It should help prevents RATIONING (which *is* a serious issue) from affecting those who properly provide for their own coverage costs.

More to come... we're off to a good start.

- Steve

Sunday, August 9, 2009

Starting Points


Before go any further, congratulations on facing up to cancer with
courage, dignity and faith - for five full years now. You've earned
the right to talk about health care from a perspective which no
one would care to gain voluntarily, and you are an inspiration.

I've always believed that government, properly constituted, has
the natural responsibility of providing certain services for the
governed, national defense being an obvious example. One principle
in establishing the nature of these responsibilities is that there are
some activities which private citizens, either in groups or
individually, cannot be expected to perform in the fair and
comprehensive ways which government can.

But just because, theoretically, government can do a better
job with certain responsibilities, should it? I've mentioned
to you before that I find much of the protests going on
against health care reform to be both obnoxious and idiotic.
Yet at the heart of these protests is a genuinely valid concern.
Liberals like myself are not inclined to recognize
this concern because we are loathe to lend overall credibility
to a movement which embraces all sorts of social views and
opinions which we find to be particularly offensive. But since
you and I have agreed to an open and honest dialogue, it
would be uncivil of me not to deal with this concern.

You can take all the blather about government controlling
"who lives or dies", roll it in a ball and drop it off a cliff for
all I care. As far as I can tell, government participation in
health care reform, as it is currently formulated, is not going
to lead to that sort of Orwellian future. The real concern
here, and worth considering, is to what extent will government
reduce the capacity of free enterprise to improve health
care through healthy competition and innovation? Let's take
auto insurance for example.

No one questions the ethics of insurance companies when
they charge higher rates for bad drivers and lower rates for
good drivers. We all recognize that this method encourages
good driving. Speaking for myself, I would be deeply offended
if State Farm decided to equalize rates and charge me the same
as some jackass in training for the next demolition derby.

I smoke - you don't. Is it fair, on this basis alone, that I should
pay the same for life insurance as you do? When it comes to
health, like automobile driving, some people make good
choices and some people make bad ones. Is it fair then, that
government should step into health care and expect
those who make good choices to subsidize the cost of caring
for those who make bad ones? I hardly think so.

At the heart of the opposition to health care reform is the
very nature of personal responsibility. Now I admit I do
get a little ticked off whenever I have to listen to all the
hogwash about certain groups of disadvantaged citizens
being universally referred to as deadbeats and social parasites.
This sort of stupid bigotry undermines the possibility
of rational debate and I will not stand for it.

However there is nothing wrong with encouraging personal
responsibility. In one way or another, as a group, Americans
are going to have to pay the entire cost of universal health
care. I see no reason to humiliate, through a system of odious
penalties, those who lack the ability to pay their fair
share. But why not offer them some honest and honorable
means to do so?

To summarize, before getting down to basic aims: America
spends at least twice as much per capita on health care as
any other industrialized nation, and yet by no objective
measure do we outperform these other countries. It follows
that we have the resources to provide universal health care,
but the system we have is not particularly good at distributing
them. Conservatives make the valid point that government
subsidies generally discourage personal responsibility.
These then are my starting points.

I propose our system of universal health care should be held to the
following standards:

1. Provide a reasonable level of health care for every American citizen.
2. Develop a health maintenance program with built in incentives to
encourage healthy lifestyles.
3. Allow for private options.
4. Protect all citizens from the high cost of catastrophic illness or accidents.
5. Reform the health industry "from the ground up" to increase the
number and and quality of health care professionals.
6. Engineer a universal system of electronic patient record keeping.
7. Engineer an accessible system of computer based diagnostics.
8. Review and reform tort law with the following goals:
A: No citizen is denied legal remedy for injuries from malpractice.
B: Lawyers who pursue cases deemed to be frivolous are liable for
censure, penalties and court costs.
C: Allow for actual damages but restrict "punitive" damages.
D: Criminalize certain acts of malpractice and negligence which are
presently the subject of civil suits only.
9. Provide universal access to low cost, generic medicines.
10. Allow the federal government to shop - and bargain for -
the lowest cost prescription treatments.
11. The cost of elective treatments, i.e., cosmetic surgery, will be
paid entirely by private citizens.


P.S.: Rather than addressing your post willy-nilly, I wanted
to start of by organizing myself this way - largely because
the subject is so difficult for me. In future posts I'll comment
on some of the points you made...

Monday, August 3, 2009

Initial Thoughts


OK, let's get started...

Usually I would include all sorts of web links in this post. But in the interest of brevity, this time I'm going to follow your lead and just put my thoughts out there. If you want proof, I'll furnish the links later.

First up, on an important side issue, I don't share your belief that illegals are a burden on the system. As a matter of fact, I think the overall contribution by illegals to our society has been and is now generally positive. With a few necessary exceptions and relatively painless rules, I would advocate a general amnesty for all illegals currently residing in the U.S. In short, I would give them an attainable path to U.S. citizenship. You can continue reading after you have stopped shaking...

If you and I are going to design a plan which works, I think we first need to define the problem and then decide exactly what we are trying to accomplish. While this may sound prosaic, it is in fact crucial.

Thus far, most of your comments appear to treat health care like any other commodity which may be the subject of a government hand-out. Your approach mainly addresses the potential harm to society which may occur when "no strings attached" welfare has the effect of creating a sub class of social parasites. Specifically, the producers are taxed to provide unearned benefits for the non-producers. You want to create a system of rewards and penalties which will not only encourage personal responsibility, but in some cases mandate it.

As usual, I sympathize. But I take a slightly different view.

Broadly, health care reform takes aim at several fundamental issues. Leaving ideology aside for the moment, consider:

1. Compared to other industrialized countries, health care in the U.S. costs more and does less. It is, in short, overpriced.
2. Health care in this country subjects otherwise self supporting citizens to unacceptable levels of financial risk.
3. Somewhere around 47 million citizens have no health insurance at all, and millions more are under insured.

Conservatives are trying to frame the issue of health care reform as "socialized medicine", with all the accompanying images of an arbitrary, big brother government achieving greater control over our daily lives. THEY (government) will then virtually decide who lives and who dies. And woe to him who doesn't vote Democratic. Personally, I think this is a crock.

Statistics show the plain fact that we spend at least twice as much per capita on health care in the U.S. than any other industrialized nation, and in some cases 3 times as much, yet we rank near the bottom of the list in terms of performance. Insurance companies spend up to an unbelievable 47% of every premium dollar for non-medical expenses. Otherwise normal, hard working citizens who pursue healthy lifestyles are subject to an arbitrary lottery. They experience debilitating accidents or develop cancers, the treatment of which not only wipes out life savings but also renders them uninsurable for the rest of their lives. Low income families face the high cost of insurance and have to make difficult choices. For those who gamble on either no coverage or coverage with impossibly high deductibles and exclusions, this means they often cannot afford "wellness options" such as regular check-ups or relatively inexpensive treatments which would ordinarily be undertaken in the initial stages of various medical conditions. These are the people lined up outside our emergency rooms, waiting for expensive treatments which would be absolutely unnecessary had they been able to get treatment earlier. And, adding to the already tragic dimensions of this problem, it is the tax payer who is going to wind up paying the bill anyway.

So all of this isn't just an issue of fairness or what the role of government should be in our lives. Mostly it is an issue of simple economics. In this country we already spend in total at least twice as much as should be necessary to provide health coverage for every single citizen - regardless of income or social class. More to the point: if we do this right, we have the potential to cut health care costs by a whopping 50% and still provide universal care. All that savings could go back into the economy to fund any number of more productive enterprises. Heck, what entrepreneur wouldn't lick his or her chops at the aspect of around a trillion dollars of added consumer spending? It seems to me we shouldn't be talking about the financial burden which government proposes to place on businesses. Instead, we should be talking about the financial windfall which rational health care reform will give them.

As you requested, in the weeks to come I'm going to provide all sorts of ideas on how we can get health care spending under control, provide better coverage and extend it to every citizen. But (and this is important), I don't intend to engage in time wasting dust ups over ideology. Let's try to make the case based on economics first.