Categories
National politics

Health Insurance Isn’t Insurance

Steve Olsen started a discussion about healthcare at THE UTAH AMICUS (I’m looking forward to part II) by asking: Is “free market health insurance” a nonsense phrase? He then identifies two issues that we must face head-on if we ar to have any hope of actually pursuing a solution to this problem.

We hear a little about “this is how I’m going to pay for it” in these proposals, but very little of “this is how I’m going to eliminate waste, fraud and excessive profits”. Most independent studies have estimated between 25 and 40 percent of America’s health care dollar is spent on things other than actually providing care. . .

Not only that, improving the cost efficiency of health care has become an economic necessity. Consider Chrysler Corporation. In 1998, Daimler Benz paid $38 billion to purchase Chrysler, and earlier this year, essentially paid Cerberus to take it off their hands. Why? To escape the billions of dollars in unfunded health care obligations to employees and retirees. Basically, a major American manufacturing company was driven to insolvency because America expects employers to foot the bill for health care, something no other major industrial country does.

It is interesting that everyone seems to know that inefficiency in the system needs to be removed and yet there are no concrete ideas being presented on how to do that by any of the candidates spouting their proposals. The last time I wrote about health care I said that we need consumers to become sensitive to the costs of health care services rather than being sensitive to the costs of insurance premiums. Steve’s post reminds me that most Americans has even been insulated from the costs of insurance premiums until the last decade or so. Free markets promote efficiency but we are not going to have a free market for health care until we address the second issue that Steve discusses. (This is true no matter what Health Insurance Connector Authority we may decided to create.)

I believe one thing that hamstrings our efforts to improve health care is our insistence on using the word “insurance”. Let’s look at the dictionary definition of insurance: “A means of indemnity (transferring the responsibility for loss) against occurrence of an uncertain event.” Using the conservative definition of socialism, insurance is essentially socialistic, since it transfers personal responsibility to a larger group in society. The characteristic that allows insurance (in the traditional sense) to work in a free market system, despite being socialistic, is the fact that the event insured against is both uncertain and undesirable. . . Except for isolated cases of fraud, the undesirability of the event being insured against means collection of the benefit will not be abused.

Is health care a proper fit for the insurance paradigm? There are instances of catastrophic illness or accidents that meet the definition. But, in general, most consumption of health care services is neither uncertain nor undesired. We want that daily dose of Lipitor to keep our cholesterol down. We purposely conceive children and consume the health care services necessary to bring a new baby into the world – and we also consume birth control medicine to avoid pregnancy. Whether the illness is diabetes or bi-polar disorder, health care is often a matter of planned consumption where strong and significant consumer demand exists for the product.

People should be allowed to choose the kinds of plans that currently pass as health “insurance” but we need to wake up to the rigged system that we are working with. Insurance companies make it more expensive for doctors to operate and consumers pay that price. Worse yet, patients who don’t have insurance are charged higher prices to compensate for those extra costs because the insurance companies set their own prices on what they will pay for various treatments and office visits. This may be financially beneficial in the short run, but the result is that patients want to get their money’s worth so they expect more services. More demand means higher prices. If consumers were sensitive to the prices of individual procedures the demand would level off as the procedures got too pricey. On the other hand, more demand can lead to efficiency, but the insurance companies keep paying the same price for a procedure (and never lower their premiums) whether the system is efficient or not so the costs remain high even when doctors find ways to improve the system.

One comment from Scott Thompson asks Steve to run for Congress against Rob Bishop again. I don’t know enough about Scott to vote for him (not that it matters since that’s not my district) but I am impressed that he would come out and directly identify the central fallacy that keeps us from actually fixing our health care system.

Categories
National politics

Fiscal Realism

I keep returning to the sentiments of Reality Check – that we need to realize that on tough issues we will not be able to satisfy everyone and that the decisions we make must be based on what is best and not merely based on what offends the fewest people. This comes up again as I read the platform for Divided We Fail. This is an initiative of the AARP. I do not wish to accuse the AARP of not caring for the future, but I think it is fair to note that when push comes to shove the best solution for the next 5 years is going to be more favorable to the AARP than the best solution for 30 years from now.

Their platform consists of 6 points – 3 on social security and 3 on health care:

  • All Americans should have access to affordable health care, including prescription drugs, and these costs should not burden future generations.
    • This sounds like a noble and universal sentiment.
    • We can deduce from their other points that the path they envision is one of government backed health care which is not possible without being a burden on future generations so this goal is unattainable in its fullness – one part has to give.
    • For more insights here go read No Free Lunch.
  • Wellness and prevention efforts, including changes in personal behavior such as diet and exercise, should be top national priorities.
    • Absolutely. This is the one undeniable truth, and the single most influential factor in the rising costs of our current health care system. How do we go about doing this?
  • Americans should have choices when it comes to long-term care – allowing them to maintain their independence at home or in their communities with expanded and affordable financing options.
    • Agreed. Only, what “affordable financing options” do they have in mind?
  • Our children and grandchildren should have an adequate quality of life when they retire. Social Security must be strengthened without burdening future generations.
    • Everyone (the AARP as well as their children and grandchildren) deserves an adequate quality of life when they retire. We might need to define “adequate quality of life” because what that seems to be today may well be unsustainable.
    • On the other hand, there is no possible way to strengthen social security without increasing the burden on future generations. Some generation is going to have to take the fall on this one. The program needs to receive its sunset – Sadly, I feel compelled to volunteer my generation. I don’t expect to receive social security benefits. Even if social security benefits are still available I hope not to avail myself of that benefit. (Why should I be a burden to my posterity?)
  • Workers should be provided with financial incentives to save, should have access to effective retirement plans, and should be able to keep working and contributing to society regardless of age.
    • I agree.
  • Americans of all ages should have access to tools to help manage their finances, and save for the future and better, easy to understand information to help them increase their financial literacy and manage their money wisely.
    • This is another point that sounds good but the pessimist in me is skeptical that we will ever really educate the majority of our population on money matters.
    • I also believe that managing money more wisely requires more than financial literacy – it requires a new attitude about the value and nature of wealth. So long as we are driven to keep up with the Joneses financial literacy won’t make us wise managers of our money.
Categories
National politics

An American DREAM

When I first heard about the DREAM Act it seemed reasonable to me. When I saw it called Backdoor Amnesty I was not really surprised, but I thought that I should look into it more closely. That meant going to see the actual text of the bill. The last time I talked about immigration I said that we needed to decide what we believe on the issue before we run around legislating a position. My own position, the more I consider it, would have us be much more open for immigration than we are now (on the books).

As I look at the text of this bill I believe that it is fundamentally sound. The purpose is to allow a path to citizenship for those who came to the US as children (under 16) and who have lived lives in the U.S. that are worthy of citizens (no run-ins with the law, no orders for deportation, completing their educations) and contributed or prepared to make positive contributions to our country (complete degrees at institutions of higher education without federal grants or served two years in the armed services without an other than honorable discharge). Not only that but they must have lived as residents for at least 5 years – no hopping back and forth across the border (limitations against 90 days at one time or an aggregate of 180 days outside the US in the last five years).

The one potential problem that we should guard against is having this used as a back door for children to get legal status and then use that as a lever to gain legal status for their parents. This law should only be applied to those who came as minors and have since completed their secondary education and followed the path to continued contribution to this country. Those who have done so should not be held liable for being brought here illegally. They should not have any special opportunity to help parents (who are accountable for coming here illegally) gain priority access to legal residence. Those parents should be required to seek legal status through existing means. Children who have not yet completed their secondary education should be returning to their country of origin with their parents and if they choose to return to America legally we should welcome them.

Categories
National politics

Suggestions on Health Care

I have noticed a pattern lately in the articles that I have been linking to (and displaying in my sidebar) – many of them (4 out of 10 currently) deal with the issue of health care. I would like to post on all four eventually but for now I would like to discuss my thoughts on some of the general principles that I am seeing in the health care discussion.

The idea of a single payer system spells economic disaster to me.

The idea of forcing everyone to purchase insurance seems fine on the surface with the typical caveats that we subsidize that cost for low income people. On the other hand, I think that people should be able to choose to not purchase insurance if they have enough personal wealth – with the understanding that they will be fully financially liable for any care they receive. This may sound backwards since the wealthy would be the most able to purchase insurance, but imagine that I am a very healthy millionaire (I am healthy, but I do not have even a fraction of a million dollars in net worth) – there is no reason to force me to purchase an insurance policy if I am willing and able to assume the costs of my health care. Perhaps I have to sign away any right to declare bankruptcy in the face of medical bills.

There are two major things that any attempt to fix our health care system must address if they are to have any hope of success.

The first is to make people sensitive to the costs of health care. Right now most of us are only sensitive to the costs of health insurance. Once we have insurance (whether our own, through an employer, or Medicaid/Medicare) we cease to be cost-conscious because most of the cost is already paid. (High deductible plans have the advantage of keeping the consumer cost conscious.)

The second crucial change that must be made is to find ways to encourage healthy lifestyles and preventive care.

If we address these two changes the entire problem would become more manageable because we would have better health and less being spent on elective procedures. We might even hope to have fewer lawsuits driving up the cost of health care as people become more involved in making their decisions of what procedures they undergo.

Categories
National politics State

Near-Sighted Legislation

The senate is scheduled to vote today on whether to debate the bill to make two new seats in the House of Representatives and give them to give Utah and D.C. My opinion on this can be found in an editorial at National Review Online (no, I didn’t write it, but it expresses the same position I hold). The one new thing I learned from that article was that the bill does not specify that Utah gets the second seat, but that it would go to “the state that stands next in line to receive a seat through the normal process of apportionment.” (currently Utah) I guess I did know that, but I did not realize the wording.

When I wrote about this issue in July I made much the same argument as NRO and stated that Utah had nothing to gain by pushing for a new representative with so little time before the next census. Representative Chris Cannon (R-Ut) points out that we do have something to gain – money. Sending a new representative earlier gives earlier seniority and allows for more pork money to be sent home from Washington. Unfortunately sending pork money home is exactly the way to buy votes for re-election.

I’m sure this sounds un-American of me but if the purpose of a representative is to send more pork home then we should reduce the size of the house to 250 or less rather than increase its size by 2. What we need in this country is not more money being passed around after filtering through the capitol. This only ties us to greater dependence on the federal government and gives more power to what was supposed to be a relatively weak central governing body.

UPDATE: The bill failed. But Senator Hatch promises to keep pushing for it until we pass his flag burning amendment. If we got him a recording contract in Nashville would he retire from the Senate?

Categories
politics

Good Advice

Political columnists don’t generally offer advice that is generally applicable to life. One exception to that comes from Doug Giles (writing about Larry Craig):

To heck with public opinion and what people will think. Focus rather on the inevitable mano-a-mano that you will one day have with God (and He can’t be buffaloed). Let that pending appointment guide thee to get real with yourself, your family, and the public.

Imagine what life would be like if everyone took that attitude when making decisions.

Rather surprisingly this ties into something I thought of in Sunday School today. The lesson was on obedience:

An angel of the Lord appeared unto Adam, saying: Why dost thou offer sacrifices unto the Lord? And Adam said unto him: I know not, save the Lord commanded me. (Moses 5:6)

My thought on that was that Adam remembered what had happened the last time he disobeyed. He did not intend to be coerced into disobedience, as Eve had been, just because he did not know the reason for the commandment.

Categories
culture politics

Glancing at Immigration

I picked up my car from the shop and happened to catch part of RadioWest. Doug was talking to a writer about immigration and the contradictions in our human nature, wanting to help people in need and trying to secure our borders. I didn’t catch the whole show so I don’t know if that perspective is representative of the entire hour, but it got me thinking about my views on immigration which eventually boil down to this – I think we’re asking the wrong question.

Our political discussion of the issue is how to deal with illegal immigrants. I don’t think we can approach that question until we have taken the time to ask – how did we get in our current position? That includes the role of immigration in our history and the history of our immigration laws. It also includes the reasons that people cross our borders illegally. Until we have that background I think that any grand compromise (which seems to be the only kind of laws we have been getting lately) is like trying to catch a fish for dinner by shooting a slingshot into a stream in the dark.

As a start, our legal limits on immigration basically stem from the Immigration Act of 1924. Though some adjustments have been made in the 83 years since, nothing has fundamentally changed in our law. Prior to 1924 we never had a comprehensive immigration restriction except that we tried to prevent people with significant criminal records or contagious disease enter the country. Now I ask the question – are we better off since we decided to stem the flow of immigration? I don’t think we are. Not only that, but I am a bit suspicious of why we chose to enact that law in 1924. None of the great advances of the past century can be even remotely tied to limiting the flow of immigrants. If we were to open our borders completely (except for cases of contagious disease or criminal record) would we be any worse off than we are now? I doubt it since we have a tidal wave of people coming in despite our laws.

I’m not arguing for amnesty, I am arguing that we need to start making an informed decision on where we stand on the issue of immigration. If we decide that it is necessary to limit immigration then we need to close the door. Until we decide what we believe about immigration there’s really no point in discussing amnesty (or lack of amnesty).

Categories
politics

Fourth Seat for Utah

The bill to give Utah a fourth seat in the House of Representatives has been hanging around for quite some time. It has not had too much coverage lately because very little has been happening with it. Yesterday I was surprised to see two editorials on the issue in Utah newspapers (Deseret News, Daily Herald). What really surprised me was that both editorials were against the bill. Back when this bill was getting more attention I was constantly disappointed that most of the coverage of the issue was supportive of the bill.

The reasons given for opposing the bill are that the other half of the legislation (giving Washington D.C. a voting member of the house) was unconstitutional. As the Deseret News pointed out, the goal of giving D.C. a voting member of the house is not without merit, but it is outside the scope of legislation. The proper way to accomplish this is to change the constitution, or make D.C. a state or part of a state. These are the same arguments I have been making on blog posts and comment boards ever since the issue was first raised. (Surprisingly, I discovered today that I have never talked about it here.)

The Deseret News offers one other reason to oppose the bill – timing. I have always argued that Utah should just wait until we get a new seat – we’re growing much faster than the country as a whole so we’ll gain new seats as the census gets updated. The editorial argues that the time is getting short enough now (only 3 years or less before we get new seats anyway) that Utah has nothing to gain by pushing legislation for a provisional seat in exchange for a (currently unconstitutional) permanent seat for D.C.

Categories
politics

Caught Up

The 9th snuck up on me this month, but I consider myself to be caught up on candidate endorsements. Admittedly I did not do an endorsement for Fred Thompson, although I had him on my list. I consider myself caught up because Fred has not formally announced his candidacy and there’s an outside chance that he will not choose to run. I have been watching closely and he is very interested in running, but unless he is holding several aces up his sleeve he is not ready to run a presidential campaign yet.

As I indicated last month, I will be writing a post to clarify all the endorsements I have made. I will list who I think are the best candidates and why. I will discuss my perspective on what our nation needs in 2008 and how that differs from the current political rhetoric. I will also be seeking feedback on that post from any of my readers so that I can refine my thinking.

As we draw closer to the election season (primaries included) one of the things we most need is informed discussion from mainstream Americans which can hopefully influence parties and override the extreme viewpoints that often dominate party primaries. This informed discussion might also have the power to generate more participation from the electorate as people choose to vote who otherwise might feel unprepared to make an informed decision at the ballot.

Categories
politics

Political Excitement

I noticed last week that I had not found much commentary worth marking in my daily reading of the news and the many blogs I follow. I went on vacation for a couple of days so that I read nothing for nearly 4 days. When I got back I was surprised at the number of things I found worth reading. If I didn’t know better I would think that I had lowered my standards on what was worth reading during my break. The fact is that for some reason there was just an unusual amount of very good commentary over the weekend.

There were two major topics, plus some good commentary that I will cover in my upcoming Fourth of July post.

One topic that I saw a lot of commentary about was immigration reform. This makes sense because it was being debated (and eventually killed) in the Senate. There were two angles of discussion there. One was about what bad legislation it would have been. The second was what we can learn about the changing face of politics in our connected world.

One particularly good post came from Steve Urquhart, who is both blogger and politician. He takes this “victory of the people” and reminds those who have worked so hard to defeat the bill that there is still work to be done, and that part of that work is to actively help legislators navigate in the new, and increasingly connected world by “embracing Senators who engage directly with the people.” The second thing that the victors need to do is foster “a productive, result-oriented dialogue on immigration.”

The second common topic surprised me. It was government provided health insurance . The surprise was not the topic, which is only going to get more air time as the 2008 elections heat up (only 16 months to go). What surprised me was that up until now everything I have read on the topic has amounted to varying degrees of “let’s make it happen.” Suddenly I have multiple independent sources taking the time to argue why it’s not such a good idea.