“You gotta knock the hell out of them — Boom! Boom! Boom!”

It’s amazing how blowing things up in the middle of nowhere can cover your faults and boost your reputation.

“If you look at what’s happened over the last eight weeks and compare that really to what’s happened over the past eight years, you’ll see there’s a tremendous difference, tremendous difference,” Trump told reporters after the military unleashed [the 22,000 pound “Mother of All Bombs”] on a largely unpopulated region of the Afghan wilderness. “This was another very, very successful mission.”

Washington Post, April 14, 2017

DISCLAIMER: THIS STORY WAS TOLD TO ME BY AN OLD FRIEND. I WAS NOT INVOLVED. IT REMINDS ME OF RECENT EVENTS—SERIOUSLY.

It was a hot summer night in a Western, sagebrush-covered desert. Another weekend gathering of “the guys,” high school boys, drinking beer away from the attention of parents and police.

This was the Pre-Game-Boy Era, when testosterone-infected young men competed with cars, guns, beer—and things that go “BOOM!”

On this particular night, around a blazing fire built in a remote clearing that had for years been the regular “drinking spot,” testosterone needles jumped when one of the guys showed up with his dad’s new Oldsmobile and a stick of dynamite.

oldsmobileDynamite

DISCLAIMER: I DO NOT CONDONE WHAT HAPPENED NEXT.

One genius among the young, beery group suggested connecting the dynamite to a jackrabbit—the desert was full of them—and went to his pickup for a roll of duct tape. The rest of the guys eagerly went looking for a jackrabbit.

Black-tailed Jackrabbit Sniffing

After surrounding and grabbing a stringy male, the boys strapped the red stick to its back, like a rocket pack, and lit the fuse. The poor panic-stricken animal jetted away into the dry sagebrush darkness, trailing the sparks of the burning fuse.

The group howled in delight and the kid with dad’s new car felt proud of his accomplishment—manly and more accepted by his peers for this extraordinary, albeit impetuous and inhumane, show of manhood.

Burning fuse on black background

Everyone leaned forward, in anticipation of the blast. But then–“HOLY S#%T!”–the jackrabbit suddenly veered back, out of the sagebrush, toward the group.  Everyone screamed and ran for cover.

The rabbit found cover too, moments before the blast—under dad’s new Oldsmobile.

“KA-BOOM!”

LESSON: BLOWING THINGS UP IN DESERTS (OR MOUNTAINS) CAN HAVE UNINTENDED CONSEQUENCES.  IMPETUOSITY AND SHOWMANSHIP, WITHOUT A STRATEGY, ARE DANGEROUS.

“Lady, Obamacare sucks only because you think it sucks!”

Conservative Republicans have done their best to convince us Obamacare is a failure, even though conservatives designed the very Obamacare mechanisms they now vilify.

We were at our cabin in the mountains on Fourth of July.  Someone, I think it was me, had brought fireworks. We began to set them off.

The rest of the family was gathered around in lawn chairs, except for my mother in law, who, because of her Parkinson’s Disease, was in a wheelchair.

Mid-firework, a Deputy Sheriff suddenly emerged from the darkness. She had seen our celebration from the road. “There’s a fire hazard warning in effect,” she said. “Stop it with the fireworks!”

My automatic reaction, when the sheriff first appeared, was to toss the remaining fireworks into my mother-in-law’s lap, just in case someone might get arrested.

I am reminded of this embarrassing moment as I listen to the “repeal and replace” debate.

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For all the Republican chest beating and finger pointing, it is at least ironic that the mandates, penalties and subsidies that became part of Obamacare were first proposed by conservatives, principally the Heritage Foundation (a conservative “think tank”) and that they were adopted with success into “Romneycare” in Massachusetts.  (Remember that “tar baby”?)

The conservative genealogy of mandates, penalties and subsidies enhanced the likelihood of passage of Obamacare. However, this resulted in an unpolished political amalgam of concessions and compromises, a sort of Rube Goldberg combination of government interventions and free-market “invisible hands.”

The Republicans have since consistently tossed the problems of these mechanisms into the laps of the Democrats–with hyperbolic rhetoric, the 60 or more attempts to repeal, the first Executive Order of the new administration, and now the Republican intimidation from President Trump and the Koch brothers (ouch!  double whammy!).

The effort to repeal and replace Obamacare with Trumpcare (and now the right-wing flanking move against Trumpcare), highlight three conflicting sets of ideas, in increasing order of conservatism.

  • Least conservative is the view that our healthcare system should take care of everyone who needs health care and that market mechanisms should be regulated to reach that result.  Financial aid should be available to help those in need.  (This is “conservative” in contrast to the “liberal” idea of government-sponsored universal health care.)
  • More conservative is government regulation, but less of it, and financial assistance, but not so generous.
  • Most conservative is the approach that government should stay the hell out of health care, and just about everything else. No regulation. No assistance. Health care goods and services left to unregulated, “free” markets.

The first set of ideas explains Obamacare, with its conservative imprint. The second is Trumpcare, as presented to the House today. The third sheds light on the internecine opposition from the far-right. It also reflects the system (or lack thereof) prior to Obamacare.

Sure, Obamacare got off to a rough start, but it has had to drag the anchors of Republican opposition. Nonetheless, it has made material progress toward implementation of outcomes we should all agree on: making health care more affordable and more available to more people.

children in white bath tub on white backgroundIn its short six years, Obamacare has done that. More than 20 million more people are insured. Premiums have risen less quickly than they would have without Obamacare–although there are surely exceptions that deserve to be fixed.

Throwing out this progress is like throwing out babies with bathwater.

And here is something else, lost in the “repeal and replace” hubbub: individual health insurance costs will continue to rise as long as the costs of health care goods and services continue to rise.

Maybe we should focus on that.

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“Medicare for Everyone!”

If you think profit taking in the areas of accident and disease is wrong, if you support efficiency and if you believe we all do better if more people have access to health care, you should agree that Medicare for everyone is a good idea.

The Problems Caused by Healthcare Reform

Step back.  Look at us.  Trumpcare versus Obamacare?  Obamacare versus Trumpcare? We are fighting over competing approaches to the same problems–and ignoring a solution that would be better than both combined.  Medicare.

No matter what, we need a better solution, and quick. While Congress continues its political tug-of-war, we are suffering, individually and as a country. We spend more and get less. The system is rife with inefficiency. Tens of millions are still without health insurance, and tens of millions more stand to lose it. People are dying.

We spend more and get less. Of all the countries in the world, the US spends the most on healthcare (and health insurance), yet health outcomes here are worse. Our average life expectancy is shorter and we have more chronic health problems.

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Medical goods and services are more expensive here. Citizens of other countries are charged far less. For example, an MRI in Switzerland is is ten times (10x) cheaper. Canadians pay at least half as much for medicine.

So we tend to put off taking care of ourselves. Sound familiar? Americans visit the doctor less often, even though an annual checkup and other preventative measures could avoid problems or catch them early. Or even save your life. If you are like me, this has too often been about saving money–with the hope/fantasy that the problem will go away.

And, as a group, we and the politicians are downright dumb. As a country, we spend less on social services than other countries, even though a few dollars for things like clothes and shelter could reduce chronic and expensive health issues among the most vulnerable members of our society. And face it, everyone else, including you and me, ends up paying for unpaid emergency health care, through rate or tax increases. In this case, an ounce of prevention really would be worth a pound of cure.

Oh, and by the way, of the 13 countries shown in the chart above, ours is the only one without a publicly financed or mandated health care system that assures coverage for all its citizens.

Are we fighting over wrong solutions? Market-centric mechanisms common to both Obamacare and Trumpcare fail to care for everyone and lead to economic exploitation. As argued in previous posts, free markets do not perform well in the health care arena.

I have already given examples of exploitation, with fabulous sums extracted by health insurance providers like Aetna and Humana. Under Obamacare, those two companies alone distributed around $22.0 billion to shareholders. They will do even for better for their shareholders in the years to come, particularly if Trumpcare becomes the law.

And then there’s the inefficiency of this whole dog pile of insurance providers. Massive duplication of overhead expenses–identified in accounting as “Selling and General Administrative Expense.” (Think of stuff like management salaries, marketing and rent. Then think of competing insurance company each paying these kinds of costs, over and over and over again.)

Looking at just Aetna and Humana again as examples: Since 2010, under Obamacare, Aetna reported around $60.5 billion of Selling and General Administrative Expense. During this same period, Humana spent around $44.0 billion, for a combined total of over $104.0 billion.  That’s a lot of overhead, and that’s just two companies.

Aetna and Humana argued that their combination would achieve efficiencies known euphemistically as “economies of scale” (aka “people losing their jobs”). Nonetheless, eliminating just one $15 million/year CEO could create savings that would pay for a lot of health care.

If you believe accident and disease are not conditions to be exploited by the “free market,” if you agree that squeezing some of the redundant costs out of the system is a good idea, and if you agree that more people having access to health care and taking care of themselves would be good for our whole society, you should want the efficiency and accessibility of a “single-payer” system.

Like Medicare.  For everyone.

Medicare Green Road Sign Over Dramatic Clouds and Sky.

 

For comparative country statistics, see this report: Squires & Anderson, “U.S. Health Care from a Global Perspective: Spending, Use of Services, Prices, and Health in 13 Countries,” Issues in International Health Policy, The Commonwealth Fund (Oct 2015) at http://www.commonwealthfund.org/publications/

“Health Insurance? What Me Worry?”–Trumpcare for Dummies.

The “repeal and replace” debate has created more confusion than clarity. Cutting to the heart of it, the question is: “How do you incentivize young and healthy people to buy health insurance?”

1Sam_thumb_w_580Health insurance seems so complicated:   different plans, deductibles, out-of-pocket costs, premiums, enrollment periods.  So many companies, so many options, so little time.

The American Health Care Act (AHCA) will be voted on in the House tomorrow.

Here is an effort to explain in simple terms the essential weakness of the AHCA, which has become known as “Trumpcare.”  It is the same weakness that has plagued the Affordable Care Act (“Obamacare”).

In summary, both assume the costs of health insurance and health care will come down over time if more people are incentivized to buy health insurance.  The difference is in the form of the incentive.  How how do you get more people to participate?  Negative incentive or positive?  Stick or carrot?

Obamacare uses the stick.  Trumpcare, the carrot.  Both depend for success on which kind of incentive works best to get the most people to get with the program.

Why is it important to have more people participate?  It has to do with the spreading of risk and cost.

Insurance is simply a financial tool to do that–spread risk and cost.  Car insurance is a familiar example to those fortunate to have a car.  The law requires everyone who drives (good driver or bad) to have car insurance. You may never have an accident, but your premiums go to help share the costs of those who do.

Health insurance plans do the same.  They allow us to shift our individual health risk and cost to insurance companies, which then spread the risk to a larger population of participants (so called “risk pools”).  Our own risk pool may include fellow workers (through employer-sponsored plans) or fellow citizens who buy on the state sponsored exchanges.

The larger and more diverse the risk pool, the further the risk is spread and the lower the costs of insurance should be to each participant, which brings us back to the central challenge faced by both Obamacare and Trumpcare.

Under Obamacare, if everyone without employer sponsored insurance had bought health insurance on the exchanges, premiums would be lower, mainly because younger and healthier people diversify the risk.

To put it another way, if younger and healthier people do not join the pool, or opt out, aggregate and individual premiums rise, because the risk ends up being shared only among an older, less healthy group.

This, in fact, was the cause of the premium increases in the Obamacare exchanges. Younger and healthier people opted out of the risk pools because it was less expensive to pay penalties than remain in the pools.

This problem also threatens Trumpcare, and it will continue to be a subject of debate. Instead of forcing participation (with the combination of mandates, penalties and subsidies) the AHCA hopes to attract younger, healthier people to participate by providing tax incentives (no mandate or penalty*).  Carrots instead of sticks.

[* Trumpcare will have a 30% “penalty” (a premium surcharge) for a lapse in coverage.  This will be payable to the insurance companies.  They need the money.]

The challenge in both cases (Obamacare and Trumpcare) is that to maintain the now popular features of Obamacare–mandating coverage for those with pre-existing conditions and making health insurance affordable for more people–it is critical to have the participation of the younger and healthier crowd.

Obamacare mandates participation.  Trumpcare bets younger, healthier people will opt for health insurance at the right price.  This also assumes young and healthy people will be rational about their health care decisions and lose their “what-me-worry” attitudes of invincibility.  If they buy health insurance only when they finally get sick, Trumpcare (and the country) will suffer a fate worse than Obamacare.

The what-me-worry attitude is just too familiar and too pervasive.  The Trumpcare switch to a “free market,” hold-out-the-carrot set of incentives is bound to fail.  Health insurance and healthcare costs will continue to spiral.  Tens of millions will lose insurance.

It is no surprise that a senior officer of the American College of Physicians, which represents 148,000 doctors and medical students, on Monday said he had “never seen a bill that will do more harm to health.”

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“Fix Obamacare! Stop Wasting Time and Money Tearing It Down.”

The Republicans have burned a lot of time and money trying to dismantle Obamacare. Instead, they and the Democrats should be collaborating to fix it.

For more than 20 million previously uninsured Americans, health insurance through the Affordable Care Act (the “ACA” or “Obamacare”) has been a boost in ways that cannot be measured in dollars and cents:  better health, lower stress, more productivity, making life better for everyone.

“Instead of collaboration to make Obamacare better, Congress spent $87 million of taxpayer dollars on 60 efforts to repeal it.”

The efforts to “repeal and replace” appear to give priority to cutting taxes for the wealthy, and assuring big profits for health insurers, rather than bringing health care to more Americans.  (By the way, can you imagine how great it would be if everyone here was healthy–or at least healthier?)

What is most upsetting is that these same conservatives, through their politics, have done their best to cripple Obamacare and now use the damage they have wrought as a cover for their efforts to repeal and replace it.

I am not saying Obamacare is perfect.  Even President Obama called for improvements. But instead of collaboration to fix the current law, Congress spent $87 million of taxpayer dollars on 60 unsuccessful attempts to repeal it.

Those who sponsored those efforts knew full well that President Obama’s veto pen was always ready.  The only explanation for their bullheaded behavior is that it was a craven, partisan effort to manipulate public opinion and weaken Obamacare.

“Conservatives, through their politics, have done their best to cripple Obamacare and now use the damage they have wrought as a cover for their efforts to repeal and replace.”

They have now turned up the volume on words and phrases, like “disaster,” “imploding,” “death spirals,” and other highly-charged rhetoric that exaggerates and misleads.  (Remember “Death Panels”?)

Of course, this has been calculated to further undermine confidence in the current law and drive away demand from the individual insurance markets.

In addition, on the very day of his inauguration, President Trump’s first order of business to call for “repeal and replacement” of Obamacare and non-enforcement of its mandate and penalties.  For the continued viability of Obamacare, this was like draining the air from your tires and putting sugar in your gas tank.

The new American Health Care Act (the “AHCA” or “Ryancare”) has problems that become more apparent every day.  It is based on false economics, false hope and deserves to fail.  Then, attention should turn to fixing Obamacare, to make it work better, more fairly and for more people.

It’s time to fix Obamacare and to stop the waste of time and money tearing it down. “Collaboration” is NOT a dirty word.

Nor, by the way, is “Public Option.”

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Paul Ryan and His $1.5 Million Powerpoint Presentation

With all the money the Insurance Industry has pumped into lobbying and campaign donations, we can certainly depend on our politicians to do what is best for the country. Right?

As you may have seen in my last blog post, the profits of the largest health insurance companies have been hurt under Obamacare.  It is encouraging that these companies and other members of the Insurance Industry are still investing in maintaining the freedom of our markets.

I have dug into the numbers to have a better understanding of their valiant efforts during Obamacare.

“Majority Leader Paul Ryan has received $1,576,754 in Insurance Industry campaign donations since 2010.”

According to Opensecrets.org, the total amount they invested in our political processes in 2016 was almost $80 million, up from around $45 million in 2010, the year of the enactment of Obamacare.

In addition to payments to industry lobbyists, these amounts include donations to incumbent politicians, assuring that caring, experienced public servants, like them, remain in office.

Majority Leader Paul Ryan, the most visible and devoted advocate for dismantling Obamacare, has received $1,576,754 in Insurance Industry campaign donations since 2010. This is the largest amount given to any one member of Congress during the years of Obamacare.

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At the same time, we can be proud of our very own Senator Mike Crapo, who has also been among the top congressional beneficiaries of Insurance Industry campaign donations, with  a very respectable $543,750 since 2010.

In addition, it is so comforting to know that around 70% of total Insurance Industry investment in our government has gone to Republican defenders of freedom and free markets.

I am sure Leader Paul Ryan, Senator Crapo and their congressional colleagues–with the benefit of Insurance Industry support and lobbying–are doing their objective, level best to craft a healthcare plan that will be good for the whole country.

Obamacare vs. Trumpcare: My Boat or Yours?

There’s nothing wrong with healthcare providers and insurance companies making a profit. Right?

rettungsboot_07You feel a sharp pain in your chest.  A spouse or friend rushes you to the hospital. You are having a heart attack and need immediate attention.

“Wait!” you cry from the gurney as the IV is being placed. You blurt out last-minute instructions as the sedatives begin to take effect: “Make sure to get a bid from at least three doctors. Negotiate the operating room expenses and the room rate.  If St. Luke’s is less expensive, pull me out of here. . . . and don’t . . . .”

When this moment occurs, if it hasn’t already, I’m sure you will demand this kind of price check.  We want our healthcare providers and insurers to make a profit; however, we must keep them honest, with competition and tough negotiation.

“Free markets and profit incentive are essential to the American system, even with healthcare.”

Free markets and profit incentive are essential to the American system, even with healthcare.  Government involvement, like Obamacare, hampers the markets and hinders the effects of profitability.  Look at what’s happened to health insurance companies, for example.

Take Aetna and Humana. They are two of the largest health insurers and agreed to participate on the Obamacare individual exchanges. Last year they reported losing money and threatened to withdraw from the exchanges unless their proposed merger was approved by Obama’s Justice Department.  Of course, It wasn’t.

Since 2010, when Obamacare went into effect, these two companies have distributed to shareholders a total of $2.6 billion in dividends and $19.4 billion in stock buybacks.  This represents a total of about $22.0 billion of distributions to shareholders between 2010 and 2016, an amount that could have been much higher if not for the effects of Obamacare and a blocked merger.

Under the new healthcare proposal from the Republicans, Aetna, Humana and the other health insurance providers will be freed of the anti-market, unprofitable restrictions of Obamacare and able to better serve their shareholders.

Better stock performance and removal of the Obamacare tax burden on the wealthy will be a big boost for those who really drive our economy.

Luxury Yacht.

Take super yachts, for example, those luxury boats longer than 79 feet.  Super-yacht sales have been down under Obamacare.

In 2010, the year Obamacare was enacted, combined reported sales of super yachts were over $3.0 billion.  In 2016, they had dropped to around $2.8 billion.  In 2010, the average price of a super yacht was $15.0 million and by 2016 it was less than $8.0 million.

Once the Republican healthcare proposal is in place, fewer people may have health insurance, but yacht budgets should increase, creating good jobs for yacht builders, brokers, crew members and others.

Hang in there yacht people.  Relief is on the way.