Saturday, August 29, 2009

Please Watch These

I know he takes some criticism and sometimes seems inconsistent; but, he is pretty much the only guy saying the things that need to be said. You would think self-avowed "Communists" being appointed to positions of power in government would make newspaper headlines, heck that should be the lead story, but the mainstream media is far too cozy with government, fears losing "access" to celebrity politicians and their credibility, importance and necessity suffer as a result.

Friday, August 28, 2009

Health Care Reform IS Important

In the current debate over health care reform I believe both of the typical sides (left/right, liberal/conservative, statist/statist-lite) are completely missing the mark.

Wednesday night, at the Indianapolis North Side Libertarian MeetUp, I heard the story of a young man who said that repair of his broken arm cost around $4,500. He said when he went to the emergency room they couldn't tell him what treatment would cost. Interestingly, I also was recently looking at a procedure and the surgeon had no idea what the total cost would be, he couldn't tell me. Huh?

Anyway, broken arm guy ended up at a med check place and after some questioning indicated that, including getting a couple of different casts over the healing cycle, he spent no more than 3 or 4 hours with an actual physician and did not require anesthesia.

Let's put this in perspective of other vocations.

A well paid Telecommunications or IT Consultant might make $120 to $220 an hour depending on what they are doing and whether it is 'after hours' work. It would not be unusual for a lawyer to charge $200, $230 or for an experienced partner or specialist (but perhaps not Johnny Cochran or Mark Garagos) up in the $300 or $400 an hour range. So, let's just use $250 an hour as a fair figure.

Four hours of time = $1,000 + materials (orthopedic cast, an x-ray).

So, maybe, worst case this should have cost less than $1,500 and maybe very close to $1,000 even ... CERTAINLY not $4,500.

Now, we know that since Medicare/Medicaid underpay physicians for services so much that it drives up costs on the rest of us by at least fifteen percent and potentially up to one third and that over reliance on "prepaid healthcare" separates consumers from the actual cost of each unit use of services. We also know that a high default rate on (far too high) medical expenses shifts the burden of those bills to those who do not default. We also know that the AMA has leveraged a lot of government protectionism of physician services into the marketplace which limits supply, specialization, innovation and other things that could drive changes in the industry or increase the supply of doctors.

So, when we talk about health care "reform" can we please talk about it outside the scope of just having somebody else (like the government) pay for everything and instead focus on why it costs $7,000 to lay in a hospital bed for two days with a kidney stone (arguably not a good use of the bed) or $4,000 to put a cast on a broken arm? How about $6,000 for an out patient procedure to fix an umbilical hernia? I'll bet, physicians or hospitals who declined to accept insurance or government payments for services could easily drop their costs down to $2,000 or $3,000 for the stone (including the MRI and the IV bags of fluid) and $1,000 or less for the arm.

The point is, libertarians and conservatives are not opposed to health care "reform". But, as is typical in arguments with more left leaning big government folks we just have a much better grasp of the root of the problem and the economics of it rather than just not caring and begging for our woefully inept government to come sweep the problem under the rug.

The cost problem in health care must get resolved before any kind of dialog on how to cover the 8.6 to 12.5 million chronically uninsured people is addressed.

The Government Can

"The government takes, everything we make
They're power hungry and malicious
Their economics are fictitious
Soon we'll have to eat our dishes..."

Friday, August 7, 2009

This gentlemen, is my profound conviction: I believe we are at this moment sleeping on a volcano.

The political dialogue in America is starting to get riotous. But to highlight the justness of those opposing ever larger government, consider the following:

You must first understand that people have a natural right to their life, property and freedom and that this is regardless of the protection of any formal legal framework ... these are inherent rights that you have as a human being. And that no action or inaction on the part of one person should create a liability on the part of any other unless they have voluntarily contracted to be responsible. For example, if my neighbor falls off the roof of his house and breaks his arm, what part of his medical bill should I be forced to pay for? If I am in a car accident and in a wheelchair for life, what part of my lifetime care should YOU be now FORCED to pay for? Would it be okay if I came to your house with a gun and forcibly demanded or took the money? Is it okay if I get someone else to do it on my behalf? Is it okay if they have a badge when they do it?

In any group of ten people, not even six (a majority) or nine has the right to take away any other's life, property or freedom except as just compensation for damages created by someone first violating one's rights. (ie: you can't take somebody's property away except as compensation for some harm they have first done to you and even then only with due process of law). So, even if you mean to do great things with someone else's money, it gives you no right to forcibly extract it from them (taxes, for example, are government force: threat of confiscation of your property, threat of violence, threat of destruction of your life, career, reputation, family or revocation of your freedom.)

The Health Care debate is bringing thousands of people out of the wood work to fight back against ever encroaching government control of our lives and our economy. Most people don't know the difference between Health Insurance or "prepaid Healthcare". Health insurance is typically intended for those things that might happen just like auto insurance is in case you have an accident. Auto insurance doesn't cover keeping the car operating well, replacing the tires or changing the oil. Nor can you get auto insurance to cover an accident AFTER you've had the accident (that is a pre-existing condition).

Prepaid healthcare is just that. You're prepaying ahead of time (generally as part of a collective group who have volunteered to participate in a plan) for your doctor visits, shots, prescriptions, eye glasses or whatever else. A third party typically administers the program and that third party has their own needs to pay staff, have computer systems and offices and earn a profit. Thus, you're paying somebody else to 'take the bet' that you'll, on average, spend less in health care than you are paying them to cover on your behalf.

Very few know the tax preferences to employers, that Democrats regularly and routinely have voted down giving tax incentives for medical savings accounts to citizens or that Congress actually mandated HMOs in the 1970s. Few know that Democrats have blocked attempts for years to increase competition for health insurance which would have lowered costs. Few consider the employer provided health coverage was at one time a "benefit" used to lure the best talent to such employer and the practice generally spread, via the free market competition for labor resources, to the point where now everyone expects somebody else to pick up and cover their medical bills.

Few understand that government provided healthcare currently doesn't pay market rates and this transfers the shortfall and additional administrative expense to the rest of us. Or that when there is less money to be made as a doctor or in inventing some new life saving drug, there will, indeed, be fewer of them to help us. Senator Jim Demint recently commented that this cost transfer increases everyone's health care costs by as much as 33%.

This issue is very complex and demands an understanding of history, technological advance, the regulatory environment, economics and human nature. I trust very few of our elected popularity contest winners, who are constantly besieged by lobbyists, special interests or the "rationally greedy" (as my friend Matt Nettleton recently pointed out) to be educated and principled enough to properly put all of these things in perspective. This is not because they are unintelligent; but, perhaps more so because a main reason for keeping government small and unobtrusive is that the free market always works better at absorbing and responding to these things than any one individual could ever possibly orchestrate from on high. Central planning doesn't work, just ask the U.S.S.R ... oh, you can't now. It is unfair to expect our politicians to be 'omniscient experts in everything' and able to foresee and correct for all unintended consequences.

The two things that have skyrocketed in cost over the past few decades are education and health care. Both things that government is deeply involved in not only via policy, but via subsidy. Do you really think a college education could cost what it does today if the government didn't subsidize people mortgaging their future with low interest, guaranteed loans? Do we really think government complexity, regulation and massive reliance on third-party payers has lowered the cost?

My initial thought in going down this path was this. Those who do not wish their rights taken away by out of control government and its elected, appointed or 'hired bureaucrat' representatives are starting to stir, and I am reminded of this great excerpt from a speech given by Alexis De Tocqueville in 1848.

...I am told that there is no danger because there are no riots; I am told that, because there is no visible disorder on the surface of society, there is no revolution at hand.

Gentlemen, permit me to say that I believe you are deceiving yourselves. True, there is no actual disorder; but it has entered deeply into men's minds. See what is passing in the breast of the working classes, who, I grant are at present quiet. No doubt they are not disturbed by political passion, properly so-called, to the same extent that they have been; but can you not see that their passions, instead of political, have become social? Do you not see that there are gradually forming in their breasts opinions and ideas which are destined not only to upset society itself, until it totters upon the foundations on which it rests to-day? Do you not listen to what they say to themselves each day? Do you not hear them repeating unceasingly that all that is above them is incapable and unworthy of governing them ... And do you not realize that when such opinions take root, when they spread in an almost universal manner, when they sink deeply into the masses, they are bound to bring with them sooner or later, I know not when nor how, a most formidable revolution?

This, gentlemen, is my profound conviction: I believe that we are at this moment sleeping on a volcano. I am profoundly convinced of it.


as an addendum - please see the following link to see an example of the increasing tensions: