Sunday, March 28, 2010

An Important Referendum in CA

Steve Chapman writes in the Chicago Tribune about the upcoming ballot initiative in California to legalize possession, growing and sale of small amounts of....marijuana!

Now I think there is the small problem of Federal laws against drugs like marijuana, but I am guessing the cooler heads in the Obama administration might decide that it would be better to let CA give it a shot.

What a noble experiment that would be. Question: what would happen to anyone in prison for possession or sale of amounts that would now be legal?

Saturday, March 27, 2010

Lights Out!

A while back I got an email from my neighborhood association that had the bright idea to get rid of our street lights. The thinking behind this brainstorm was twofold, one being to combat global warming and the other being to save money.

I replied with what I thought was a pretty witty piece about taking us back into the Dark Ages. While I would support preserving the night sky for stargazing, I could not see any evidence for significant cost or carbon savings, certainly not enough to offset the disadvantages of dark streets. The idea seems to have died, as the neighborhood is still lit at night.

But I must have been wrong, as now the whole world is turning out the lights. I can't wait for someone to estimate the additional crime and accidents that will occur during that hour.

Wednesday, March 24, 2010

The Health Care Bill

It should not be all that surprising that we finally got a health care bill passed. Before the Scott Brown victory in Massachusetts, the House and Senate had already passed separate bills; all that remained was to combine the two. The House had the courage to pass the Senate bill with the hope that a reconciliation bill of some kind will remove the most egregious parts of the Senate bill.

The opposition of the populace, as measured by polls and other more informal means, ended up being set aside in favor of the hope that by November all will be forgotten, by a respectable belief on the part of some that the bill is really good for the country, and no doubt by a lot of armtwisting and dealmaking on the part of Pelosi, Reid and the President.

I do believe that the Anthem/Wellpoint increases in individual insurance rates in California, discussed by me in prior posts, played a not-insignificant role. Those increases pointed to the failure of the individual insurance market and defused some of the critics of the bill. The President and others hammered on those increases as evidence of what would happen if the bill did not pass -- and to extent they are correct; the individual markets are in a bit of a death spiral due to adverse selection and other issues.

I would really like to see a news reporter did into that Anthem decision to see if the Anthem folks understodd the gravity of their decisions at that time.

But this is now all water under the bridge.

On the positive side -- always an optimist -- the bill does some good. I have said for some time now that this country passed the point of not wanting to have all citizens have decent health insurance. This bill goes a long way to fixing that basic social safety net issue. Let's not deceive ourselves, however, there will still be a lot of uninsured people, just as there are a lot of folks who do not file their tax returns.

And there is no doubt, as I note above, that the individual and small group health insurance market was headed for disaster. That was making it extremely difficult for self-employed people and for small businesses (if you worked for an employer who did not offer insurance, you had to buy it on your own in a lemons market). That probably induced many people to work for large companies rather than striking out on their own. Removing that wedge between self-employment and working for large companies could be good for entrepreneurship and innovation. I have little doubt that access to health insurance was a large factor in many decisions as to what kind of career to pursue, at least at some point in one's life.

If the new exchanges function well, my hope is that the bill will be altered in the future to allow people in companies that offer plans to buy insurance from the exchanges as well. As the bill stands, that is not allowed (I am not sure why). If that would happen, then the link between place of employment and health insurance will indeed be broken. That in my mind is one of the better things that could happen. Sorry, but I just don't believe that an employer has the ability or incentives to offer me the best kind of insurance. I don't have Dartmouth offer me retirement investment services; they just give me a portion of my salary and let me invest it in my choice of independent, professional investment funds. Health insurance should be handled the same way.

It is too bad that the tax on plans was taken away because of union opposition (well, postponed until some time well in the future). To reduce demand to a more natural level, we need to remove the 25% - 40% subsidy given to purchasers of insurance through the exclusion of health benefits from taxation. I suspect that this tax will get moved up in time as the costs of the new bill become obvious. Get ready, but it actually is a good thing (maybe next they will remove the interest deduction for first and second homes as well?).

I have to look through the bill to see what provisions there are on the supply of doctors. I really worry what is going to happen with another 20 million or so people putting unlimited demands on an already-stretched health care system. This is not the time to be without a physician, for sure -- line one up now. And, I suspect that in the future, because there is going to be more nonprice rationing, WHERE you live will become almost as important as what company you work for, in regard to having access to medical care. I suspect that health care is going to become very similar to public schools, with location being very important and with a two tiered system emerging as well.

So, we are off to a brave new world. At least Americans can now walk through Europe without being thought of as monsters who don't provide health insurance to their neediest of citizens. And there will be some interesting possibilities for innovation and efficiency in this new system.

Saturday, March 06, 2010

Is This How History Will View Bush?

Interesting editorial by Richard Grenell in Al Jazeera on the current Iraqi elections.

On January 10, 2007, George W Bush, the then US president, defied critics and ignored popular opinion and political polls in the US by committing more than 20,000 additional American troops to the war in Iraq.

"The Surge," as it is commonly called, has since been credited with bringing the Iraqi people more security, less violence and greater freedoms. By July 2008, the surge was heralded as a success from Baghdad to Boston.

Grenell also has some choice quotes from Obama, Biden and H. Clinton on their view of The Surge.

There is no doubt that the war was costly and the planning and handling of the immediate post-war situation was pretty well botched. Also, the rhetoric for the war was unfortunately focused too much on WMD instead of the facts of S. Hussein's greater non-WMD threats to peace, security, and freedom.

Run the counterfactual for me, please. What if the US had not invaded Iraq back in 2003? Quick bottom line: would the Middle East and the rest of the world be more or less secure than we are now? Would the prospect for longterm peace, security and freedom in the Middle East be more or less than now?

Obama's Unrelenting Rhetoric Against Insurance Companies

Obama today steps up again to rail against insurance companies "arbitrarily and massively raising premiums."

This is so deceitful, and the President and his advisers know it. Larry Summers ought to be ashamed to have this kind of rhetoric being used for purely political purposes.

Insurance companies are not the reason for the rising cost of health insurance any more than the local grocery store is the reason for the high price of orange juice after a freeze in Florida.

Folks might want to explore the situation in Massachusetts, a state that passed a mandatory health insurance law a few years back. The Boston Globe reports today about health insurance price increases in that state that range from 8 to 32 percent (in the text, one individual reports an increase of 40%). The Globe even notes that
Even as businesses and individuals feel the pinch of surging health costs, three of the four largest state health insurers last week posted financial reports showing operating losses for 2009.
It appears that consumers in Massachusetts got a gift last year from their rapacious insurance companies -- health insurance at below cost prices. That, of course, cannot continue.

Even more scary about all this is that the spectre of price controls has risen. The Administration added language to their insurance proposal that would allow the Federal government to review price increases by insurance companies. Massachusetts is reviewing all increases that exceed 4.8%. Real price controls are not far behind.

I suggest that if Obama cannot get a straight answer from the insurance company CEOs he listen a bit more carefully, with an open mind. Or maybe he can start by reading the several page letter that Wellpoint put out after the Californica fiasco (linked to in one of my earlier posts on the topic).

Even better, I suggest that Obama and his advisers go talk to some health care providers -- docs and hospitals -- and ask them what their price increases are. I guarantee you that they will be closer to the source of health care price inflation at the hospital than at the insurance company office.

Wednesday, March 03, 2010

And Another Person in Favor of Consumer Health Responsibility

This article by Barbara Kiviat discusses the importance of knowing price when we buy things, including health services.

I am about to go on a rampage to get my local hospital and clinic to clearly post prices. As I know some folks on the Board of Trustees and other high places, it should be fun. I wonder how many of the Directors of the hospital know what things cost at the institution they are responsible for?

Monday, March 01, 2010

More on the Case for High Deductible Policies

Two fresh editorials out today, suggesting a wave (!) of positive sentiment for high deductible health insurance policies.

One from the governor of Indiana, describing the Indiana experiment with Health Savings Accounts in combination with high deductible, high copay policies: "Hoosiers and Health Savings Accounts."

The second is titled "The Case for High Deductible Health Insurance."

If the Obama administration is reading these things, I hope they take them seriously. Such policies will be one critical part of a health care system that delivers care efficiently.