Health Care winners and Losers

People on the left of our political spectrum believe they get to pick winners and losers. Case in point, The Urban Institute believes we should tax food as has been done with done with tobacco and alcohol. They go on about the obesity epidemic causing increases in health care costs. I for one do not argue with the concept that we must combat obesity. I have struggled with this my entire life. Taxing certain foods simply won't do it.

If you want obese people to respond financially there are things that can be done within the private sector. The congressional health care overhaul bill bans refusing health care coverage for pre-existing conditions. This takes away any consequences for unhealthy behavior. I have been for most of my adult life around 300 pounds and now have diabetes and a heart disease risk in my family. I pay the same premium for health care insurance that my co-workers do even though most of them are slim and healthy. If my rates were based on my life circumstances I would be forced to take a harder look at my behaviors. As I get older I might even be refused coverage. I have been struggling to get healthier, if my health care costs went up astronomically I might be forced to get much more serious about it. Additional taxes on soda, doughnuts etc., not even close. To change the insurance market though government would have to rescind a good many mandates that are in place today. One size fits all insurance allows unhealthy behaviors to go on with no consequences as most left wing ideas do. Additionally if we add taxes to selected foods (no chance of that list being arbitrary based on political contributions at all is there?) we will also be taxes healthy people for the same foods. That doesn't seem fair to me. Who gets to decide what is unhealthy. The Adkins diet considers carbs unhealthy. Tax on pineapple. Other diets urge low fats. Olive oil anyone? Ok you say we would never tax those foods, they are healthy foods. The question is who gets to decide? Some smart person that works for the government. Once again they believe they know more than us.

While we in the taxing mood though, risky sexual behaviors cause huge medical costs (government coverage for children of single mothers, sexually transmitted diseases, long term care of HIV and AIDS). Maybe we can find a way to tax them as well. People who jump out of airplanes for pleasure have higher accident incidents than normal. Should we tax this? People who ice skate may have higher accident occurrences. (I broke my ankle a few years back). Tax them as well? Where does it end?

Government cannot be trusted to decide who is a winner and who is a loser. There is no way to remove human nature from the equation. Whoever goes on the committee will have a bias as to what is unhealthy and what is healthy. Using government to try to make people be healthy is like using a sledge hammer to drive a finishing nail. They can only impose broad based solutions. It cannot be successful. Real reform would actual let the market impose outcomes based on real life circumstances, not who has the best lobbyists.

Winners and Losers

One of my prime objections any time the government gets involved in areas that private enterprise should rule is that they should not have to right to decide who wins and who loses. Another glaring example of the folly of government involvement is the current health care debacle.

One of the largest hidden costs of health care today is the cost of malpractice insurance each and every doctor must pay. The number of frivolous lawsuits is the prime reason that this is true. Most doctors at one time in their career will face a malpractice suit of some form. This results in outlandish insurance rates for malpractice insurance.

You may remember back to the Bush administration that the fact that Bush and Cheney both had backgrounds in the oil business. This was of course enough evidence to the mind of a leftist that they were paying off the oil industry by not forcing additional regulation on them. No such charge can be found today though. Barak Obama has a noted law background as does his wife. In all of the reforms he wants for the health care industry none can be found that will add additional regulation on torts. Is this not a 'payoff'? Using the same microscope used in the last administration it would be, but of course it is not. It is a simple case of the President making the rules and deciding who wins and who loses. In his mind 'Big Law' is not a villain but virtuous so he makes sure that they are not touched.

Any realistic look at this situation has to show us that tort reform could be one step of many in reducing heath care costs. A system where the loser of the suit would pay all the legal fees would go a long way to reducing the cost of insurance and therefore overall overhead to the doctors. If the suits that are on the more frivolous end would be given a second thought since the risk would be much higher. There is simply no risk to someone bringing these suits today. Since the people writing the laws as well as the President have law backgrounds I wouldn't hold my breath on seeing it happen. Since they won the election they get to pick to winners and losers. This doesn't sound like the system our founders put in place, but it is the corrupt system we have given ourselves.

Health care and thinking out loud

I am not a doctor so I would never dream of making this assertion sound anything like official. I have noticed that the cases of swine flu or H1N1 virus are skyrocketing in other countries, but the cases in the United States are not skyrocketing. A recent story says the number of cases in Britain has doubled in a week with 100,000 new cases in a week. Given that England is much smaller than the United States and the total number as of July 17 (figures released every Friday) was 40,617 in the US what explains this?

Once again I can't say with any certainty that my theory is correct, but I wonder if the fact that in our country availability of health care is almost universal (although not insurance) but in European countries health care insurance is universal but not access to care. Whether you are insured or not you can see a doctor here. That is not the case in socialized medicine countries.

Just thinking out loud. Maybe someone should consider this before we make our health care system like theirs.

Mr President don't Comment

President Obama last night stated in response to a question about the Cambridge Police and Professor Gates that he didn't have the facts but they acted stupidly. First of all when you say you don't have all the facts it is best not to comment.

He stated that since there was adequate proof he lived there it should have not gone any further. If he had looked into it he would have seen that the professor would not show his ID because he was convinced they were there because he is black. (see the report here) If he had showed his ID it could have ended there. President Obama stated that anyone would have been angry. I for one would not be angry if an officer came to my door and asked for my ID and told me someone reported seeing someone trying to break into my house. I for one would show him my ID and tell him maybe the door stuck or something similar. I would not make a scene and call him names.

In a clarification from the White House (see it here) the President says "Let me be clear I was not calling the officer stupid". Since this is an action by one person how exactly can he not be calling the officer stupid? If the officer arrested someone after it was proven he did nothing wrong he can only be evil or stupid correct? Maybe more facts are required before commenting.

President Obama, show some leadership and stop acting like an activist. You are now among historical figures such as Washington and Jefferson. You are behaving like dare I say it a community organizer?

If not for straw men ...

I think everyone understands the meaning of a 'straw man' in areas of debating or speech making. The definition on Wiki is "To "attack a straw man" is to create the illusion of having refuted a proposition by substituting a superficially similar proposition (the "straw man"), and refuting it, without ever having actually refuted the original position." Increasingly President Obama defeats the straw man.

He refutes that doing nothing is not an option. No responsible Republican activist wants to do nothing. John McCain ran a terrible campaign for President but had a very responsible and prudent health care reform plan. President Bush tried encouraged congress continually to reform the tax favoritism currently in place for employer based health care. There is a belief on the right that if the tax benefits accorded to employer health care were given to non employer health insurance than companies would devise more plans that are more affordable for individuals and small businesses. Even if you don't believe this, it is not the same as doing nothing.

President Obama says that Republicans are trying to damage his presidency in combating his brand of health care reform. He charges that they are practicing politics. On its face this is ludicrous. Of course the Republicans are interested in their parties' performance. I suspect he didn't call it political when as a Senator he rejected every effort at reform proposed by former President Bush. I don't suppose he thought it political when his party rejected every attempt to reform Fannie Mae to regulate their madness and head off the housing crisis. As usual someone playing politics to President Obama is someone he doesn't agree with, just as a special interest is one that does not contribute to him. Let's say for argument that the Republicans don't have an ideological reason to oppose him and are just doing it 'for politics'. They have 40 Senators and less than two hundred House of Representative members. They couldn't stop a vote on what to have for lunch. The fact remains that the most powerful opposition is coming from his own party in the form of freshman and 'blue dog' Democrats.

He continues to make everyone a villain except himself. The doctors are villains, the insurance companies are villains, the opposition politicians are villains, the profit motive is villain. While he provides much clarity he provides no leadership. Only he is to be considered to be pure. He made the charge that doctors remove tonsils to make more money. If he has an instance of this, that sounds like medical malpractice to me. Maybe he should turn it over to the authorities. I know from my personal experience that both my doctor and my children's pediatrician would make nothing from a tonsillectomy since neither are surgeons. Straw man or outright lie?) His idea of changing the way business is done in Washington as he promised so much in his campaign is simply getting bi-partisan support only if they agree with him. While I don't necessarily fault him, after all his party won so they get to set the agenda. I do blame the voters who bought his bill of goods. They bought his song and dance about hope and change even though nothing in his past pointed to him being anything but a committed leftist.

Mr. President how about putting away the straw men and answering these questions:

- How exactly does your plan reduce costs?
- How exactly is it competition when the private competitors have to follow the rules set down by the government option?
- How is it competition when the government can print money but private enterprise cannot?
- If the opposition is the Republicans how can they stop this plan with such a small minority?
- if the government is so able to be more efficient how do we explain the deplorable Veterans Administration hospitals, the cost overruns of medicare and the cost overruns of Medicaid?
- Exactly what is the breakdown of the un-insured and shouldn't the plan find a way to attract those people instead of replacing the entire existing system?

I suspect those and other questions will not be addressed. After all anyone who disagrees with him is a tool of special interests so he doesn't feel the need to respond.

Competition, Chicago Style

President Obama keeps telling us how we need the government option to 'compete' with private insurers. This is of course ridiculous on its face. I have previously written about this here. Now we are getting more details about what that competition looks like. Here is a link telling us that private health insurance is not to be illegal, but in their own piece they tell us that your private health insurance will be grandfathered in (section 102 (a)) UNLESS they enroll new people, start charging more or make changes in coverage. If that happens they will have to comply with the terms of the government health insurance. This is what constitutes competition in the mind of Pelosi, Reid and Obama.

To make an analogy lets say Anthem is the dominant insurer in market. This is the same as telling the other players in the market you have to offer at least the same coverage for the same price to sell in this market, and HAVE THE FORCE of LAW to do it. This is absurd!!! This is not competition. This is FASCISM!!! (note fascism is not the same as Nazism and no one is making the claim morally or economically that President Obama believes in Nazism).

Health care in America has problems. The answer to those problems are not government control. This is absolutely the last thing we need.

The CBO has determined that far from saving us money the health care takeover proposed will cost us much more. (see here) Given the sad state of the federal budget (see the directors blog, Director of the CBO here), more hits to the budget simply cannot be withstood. More true competition (not Chicago style competition) is what is needed. Congress could today remove the barrier to private firms competing across state lines. While this would not fix all of the problems it would allow more creative plans and attract some of the people who opt out of coverage now. A great number of people simply can't or won't pay the premiums that are charged either for plans through their job because they are healthy and see it as a bad investment. If however they were presented wiht alternatives with high deductibles, low premiums and high co pays they would carry it. Surveys have shown this to be true. This would take a large bite out of the number of uninsured people. Increased competition would bring these plans about.

Higher out of pocket prices combined with tax free flexible spending accounts are what is needed. It is cheaper to go to the doctor than it is to go to a professional sports game. It is cheaper to go to the doctor than it is for some people to get their hair cut (not me I don't have much hair to cut). It is cheaper to go to the doctor than it is to take the family out to dinner. It is cheaper to go to the doctor than it is to go to an amusement park for one person. All of this demonstrates that the current system makes it unusually affordable for holders of insurance to go to the doctor. That is terrific if you are sick. Low prices always lead to higher demand. Over use of the systems keeps costs high and prevents more affordable plans. Cases of sick kids that could be treated with Tylenol or cough syrup now warrant a trip to the doctor. A case of the flu that could likewise be treated, gets a trip to the doctor and of course you always need a prescription. Too many people don't self ration because with the relatively low prices there simply is no reason to.

If coverage were scaled back by the market, affordable coverage could be offered to the not insured at more reasonable rates. In a market based plan if you have higher needs, a chronic illness etc. you could obtain the plan you need at a higher price, but still affordable. This can only come about by the government getting out of the market, not taking the market over. When the government gets involved it does not compete it sets the rules. Private competitors have the option to follow their rules and take their chances or get out of the market into other areas of insurance. Ultimately this is what will happen when the Chicago gangsters (also known as the government run by the head gangster President Obama and his capo regime Rahm Emanual) get into the market. We can still stop this farce, sign the petition to stop this sham. Be informed about what this plan looks like. If you study the details you will have to agree this will not help.

Settled Law

Judge Sotomayor has said that abortion is settled law. This has of course been said by many people at many times. I believe they are saying that existing precedent law must be followed and what goes unsaid is that any changes to current abortion laws must be confirmed by the all knowing all seeing justices.

As I read it there are other pieces of settled law that were not respected. The ninth and tenth amendments were settled law. They are actually part of the Constitution and ratified by the states. Over the last one hundred years we have chipped away at these amendments that leave powers not provided for to the states. The court has chipped away at the Commerce clause and the first amendment freedoms as if not settled law.

If the court and congress can chip away at ratified law why on earth would we consider precedent based activist judge created law sacrosanct? It boggles the mind if you take time to think about it.

Uncertainty is plagueing the Economy

Politicians, economists and just about everyone else has an idea about why the economy shows little sign of recovering anytime soon. Reasons include 'George Bush messed it up so bad it will take time', this of course is a rehash of the Great Depression charge that Herbert Hoover ruined the economy by being stingy and not doing enough. We have heard that the stimulus is the answer but won't work as quickly as earlier planned.

I am not an economist and don't play one on TV, but do know a few things about economics. First of all very little of the stimulus has been spent. This was warned by many people because the projects they targeted need to get through many layers of bureaucracy to get to be 'shovel ready' as VP Biden likes to say. I personally don't believe these projects will work either, but as it stands very little has been spent, somewhere around $29 Billion out of $787 billion.

My observation is that uncertainty is holding things back more than anything else. Large enterprises are not expanding, small enterprises are not expanding or starting. This is due to many things. At the beginning of the downturn inventories were astoundingly high. This is working itself out and will be back to normal soon. Many companies have cut costs by reducing hours worked such as giving mandatory days off, and furloughs. Before they start hiring they will return these people to full time. When demand does pickup they can ramp up quickly without massive hiring.

The big question remains why is demand not increasing? This is where paying attention in Macroeconomics in college would have helped people. Demand is increased by many things, expectation of decreased supply, expectation of future increases of raw materials, expectation of competing goods as well as a multitude of other factors (this is why economists rarely agree about their models). Does something about the last one sound familiar? The government is spending money like never before. Businessmen know that you cannot continue spending in massive deficit for a prolonged period. Something has got to give. Either new revenue needs to come in, (increased economic activity, increased taxes etc) or expenses need to be cut. If a businessman were to guess he would have to say revenues are not going to increase and expenses will not be cut so taxes will be raised. Since said businessman does not know what taxes will be raised and on whom, he cannot take risk until he knows those things. In the Congress we have two pieces of legislation that also will affect every business without a lot of details. A health care takeover bill and an energy takeover bill. We do not know the extent of the mandates, nor the details of how they will be administered so again no risk is advisable until we know these things.

That takes care of business. How about consumer spending? The guy or girl that still has a job sees the newspapers too. We see a lot of big changes coming without a lot of details. Do we buy new cars? Do we buy that big screen TV? How about a second home for investment? Not likely on all counts. We also see that banks are becoming solvent, but lots of smaller banks are being closed. This of course reduces competition and gives more power to the big banks that the government propped up. That doesn't signal good things for the consumer, so again risk is not advisable with the prospect of losing one's job in the near future.

What will turn it around? Certainty! As harmful as new taxes will be, or the health care or energy bill, at least if we know what flavor they will take the consumers and businesses can make plans. One thing I can predict is that if government health care changes are undertaken it will be good for large enterprises, but very bad for smaller enterprises. I am sure those business owners believe the same. Small businesses usually lead us out of recession. That cannot happen this time because they will be the targets of health care. Energy law changes will hurt smaller enterprises and consumers the hardest. That sounds like a double whammy to small business. They won't be adding workers any time soon.

So are we just out of luck to fall into a second Great Depression? I don't think so, but times may get worse before they get better. Money is nearly free. Government is offering incentives to their pet industries. Inflation is on the horizon. For me it is still impossible to predict how long this will go on. Government will work with large enterprises and when they recover the economy will recover. This will take longer and be more detrimental to smaller enterprises. This will lead to a less healthy private sector and a larger public sector, so even after it recovers it will not be a robust recovery since the government will be pulling the strings. This is not an optimistic future, but it is the one I see. As negative as it sounds removing uncertainty may be the best thing they can do, God help us!