Monday, August 31, 2009

ML Video

I watched the video below by conservative comedian Evan Sayet about the bizarre thinking habits of the Modern Liberal. I question the wisdom of having our political dialog dominated by comedians. Discourse is being dominated by comedians taking pot shots at eachother. We see Colbert, Beck, Letterman, Coulter, Allan Colmes, Sayet, Jon Stewart and others dominating discourse.

BTW, has anyone noticed how many of the Conservative comedians were from liberal backgrounds and became Conservatives .... probably because there are so many liberals comedians that becoming "conservative" is a way to stand out from the pack. Beck and Sayet were from liberal backgrounds.

The one thing I would have added to the video is the observation that Modern Liberalism is actually quite old. Historically, Modernism follows the Enlightenment. Modernism was well underway in Europe at the time of the Founding of our nation.

Modern Liberalism was pretty much an elitist reaction to the classical liberalism of our nation's founders. Classical liberalism was based a refinement of the Aristotelian tradition. Modern liberalism is one of the many philospies developed along the thoughtline of Kant, Hegel and Marx.

The video below is a neocon (liberal who became conservative) view of modern liberalism and modern progressivism.

Sunday, August 30, 2009

Tax Breaks for the Medical Savings and Loan

This post is in response to a twitter question from My1stAmendment.

The Medical Savings and Loan program is not dependent on tax breaks or any special laws from Congress. The idea is primarily about re-organizing health care financing so that it is based on the life-cycle of the individual as opposed to basing it on the experience of a group.

If the health care financing were owned by the individual, it would automatically be portable. People would have health care resources when laid off, etc..

The program is currently hendered by tax law as health insurance is favored to medical savings and is favored to direct payment of doctors. A person self-financing care must pay with post tax dollars.

There actually is one big problem with the medical savings and loan. The problem is the temptation people have to use their health savings for other ends. I think the government would be wise to let people place money in their HSA without taxes. They would get taxed and pay a penalty if they withdrew money.

The model is not dependent on any government action. It could be implemented by any group wanting to lower the cost of their health care by moving from pooled financing to individual financing. For that matter, I think one of the biggest problems in our healthcare today is that people plan their health care around tax considerations rather than around their health needs.

Health Care Exchanges

One of the things I dislike about modern thought is this absurdity that creating an "exchange" somehow makes something free market. Even worse is the fascination with large centralized exchanges.

I follow the Deep Capture blog which details the capturing our stock exchange which lead to the raping and pillaging of our industry and financial institutions.

The centralized exchanges championed by the elite simply provide a capture point in the system that will give corrupt insiders even greater control over our lives.

In colonial days, there were exchanges to buy and sell slaves.

The existence of an exchange does not mean there is a free market.

It is true that we have a problem with portability of insurance. Insurance is tied to a pool of people. If you leave the pool, you lose your insurance.

HR3200 seeks to subsidize the creation of an exchange that would overcome this problem.

The wiser approach would be to look at the roots of the problem. The root of the problem is that the silly medical financing system that evolved during a half century guidance by the likes of the sainted Teddy Kennedy entrusts our health care resources to pools rather than to individuals.

Were individuals to own their health care resources (as in the Medical Savings and Loan) the accounts would become portable of their own accord. 401K investment programs are inherently portable as they are owned by the individual worker.

The weakness that HR3200 is trying to overcome through the creation of an exchange shows that the entire thinking behind making pools the primary mechanism for funding care is flawed.

We live in a day when exchanges are targetted for capture, why are we looking to subsidize the creation of an exchange when the problem would go away if we empowered the individual by making the individual the owner of their health care resources.

The Health Insurance Exchange woven together in HR3200 appears to be the creation of the same type of thought that created Credit Default Swaps, Freddie Mac, Fannie Mae, Hedge Funds, Naked Short Selling and other intrinsic corruptions that are reducing our nation.

Below is a presentation about how the captured market works. In the case below the company called Sedona had friends at the SEC so information about its capture was investigated. Hundreds of small firms are destroyed by corruption at the exchange:

Naked short selling - redefining systemic risk from Judd Bagley on Vimeo.

Saturday, August 29, 2009

Public Financing and Tort Reform

A mantra of Conservatives is that tort reform is a necessary component of healthcare reform. Big dollar lawsuits drive up the cost of delivering healthcare and have a tendency to drive small firms out of business.

I share the Conservative distaste of big law, but have a different take on the solution.

My last post brought up the plight of David Goldhill. His father contracted a hospital-borne vector during a routine doctor's visit. The system consumed some $600,000 in expenses in unsuccessful attempts to remediate the disease before Mr. Goldhill's father gave into the disease.

On researching hospital-borne diseases, David Goldhill discovered that hundreds of thousands of people suffer similar fates. Even worse, he discovered that simply precautions would have prevented the infection.

Much as I hate tort lawyers, I have noticed that the threat of big lawsuits often improves practices in those industries being sued.

Rather than just rail against groups I dislike, I asked myself the question: "Why hasn't the threat of big lawsuits forced hospitals to take the precautions that would reduce hospital borne infections?"

The answer to this question is that the mix of public financing and law creates perverse incentives for people to work against their best interests.

We can see this in public education. Liberal educations learned years ago that they can take advantage of the public payment system to get any program that they desired. If educators wanted to install program A, they could force the installation of the program by having a group supportive of program A sue the school in a court with a judge sympathetic to the program. The principal, who is supportive of A, would give a feeble defense and the court would then force the program into the school.

On paper we see a lawsuit of a public interest group against a school. In actuality the lawsuit was against a public who had no real representation in court. Both the plaintiff and principal have interest in the school losing.

Whenever there is a system of public financing, it is easy to rig a court battle in which the parties of the battle are working against the public.

The American public has been fooled into believing that the lawyers in insurance companies (or in public office, for that matter) are defending their interest. In some cases they do.

At a systemic level, the dynamics of tort have created a mechanism that externalizes costs onto the public.
Since insurance companies pass the cost of tort back to the public they represent, they really don't lose law suits. While an insurance company might lament about being beaten in court, the insurance company will simply jack up premiums to cover the cost of the suit. As the insurance company takes a cut of the premium, they are actually a beneficiary of the system.

The insurance industry benefits from increases in rates for malpractice insurance.

Big medicine benefits from big lawsuits as it forces them to raise their rates. Raising the rates, incidentally, increases their profit.

The system is corrupt to its core with big lawyers, big insurance, big government and big hospitals all feeding off the rotting corpse of our medical system. The fault is not simply with the tort lawyers the fault is with the misuse of public financing in health care.

Our desire to create a system of public financing has created a system with perverse incentives that reward hospitals for doing harm.

Simple precautions could have prevented the death of David Goldhill's father. Was the system geared toward the benefit of the patient, it is likely that Mr. Goldhill's father would have survived. Instead what happened is that big medicine churned through some $600,000 of expenses on futile efforts.

The system worked this way because the efforts during the Kennedy era to create a mechanism for public financing of health care created a Kafkaesque system of perverse incentives which accomplish the opposite of quality care.

The real way to improve our hospitals and to reform the tort system is to move away from this horrible system of public financing to create a new mechanism of self-financing for health care.

Liabilities and Catastrophes

Scott Hinrich pointed me toward an article in The Atlantic Monthly by David Goldhill titled How American Health Care Killed My Father.

The article is one of the few pieces in the health care debate that goes beyond partisan bickering on the public v. private insurance debate to look at the effect that the health care funding system has on treatment.

Mr. Goldhill's father went to the hospital for a treatment of pneumonia. While at the hospital he contracted other diseases which eventually did him in.

The article spoke of hundreds of thousands of people dying of hospital-borne infections and other easily remedied mistakes. The article is careful to point out that proper sanitation would dramatically reduce these deaths. Dare I mention that house calls reduce the transmission of vectors as well.

The article ends with his Mrs. Goldhill receiving a copy of the bills from the hospital totaling $636,687.75.

I doubt that the hospital received a full payment of this amount. However, the case shows the hospital being rewarded for having created the condition that led to the death of Mr. Goldhill.

This game of rewarding hospitals for killing someone is exactly the type of foul ups that government financed health care creates.

The free market would solve this problem through liability claims.

Doctors take the Hippocratic Oath that they would do no harm. There is an implicit contract between doctors and patients that the doctors would be practicing medicine in a safe environment. This is a risk the doctors can and should have controlled.

If I contracted salmonella at the local fried chicken restaurant; they would be liable for my medical expenses. If I contract flesh eating skin disease while visiting my local hospital for my annual naval examine; my hospital should be liable for my hospital-borne disease.

When liabilities (such as hospital-borne infections and food poisoning) are taken into account, businesses will invest in controlling the liability.

Food poisoning is much rarer now that cooks are aware of their liabilities and of the food preparation techniques needed to avoid lawsuits.

The important thing to note in this article is that our nation's efforts to fund catastrophic care seem to have created perverse incentives which prevent common sense measures that would reduce hospital-borne diseases.

I believe that efforts to create a silver bullet for handling catastrophic care are all doomed to failure as such efforts create a perverse incentive to will catastrophes into existence. In the Goldhill case, the hospital made hundreds of thousands of dollars off a mistake that killed a patient.

In most catastrophes, one can find a number of parties with differing degrees of liability involved.

Rather than trying to find a silver bullet to solve all catastrophes, I believe that we are much better off having a system that treats each catastrophe separately. The liability route helps people take measures to reduce liabilities.

The medical savings and loan has a thing called a Healthcare Advocate. Just as a good claims adjuster seeks out all of the liable parties involved in a claim, a good health care advocate would work with a client to help place claims against liable parties in a catastrophic claim.

Thursday, August 27, 2009

Plagiarizing My Own Work

If you are wondering, I am currently in the process of plagiarizing the posts in the blog about the Medical Savings And Loan and placing them on the site

My fiendish plan is to accumulate the blog posts into a book.

I am making some changes along the way. For example, the chapter titled A Drop in the Bucket takes the blog post Actuarial v. Lifecycle Analysis swaps the word "actuarial" with "pool."

Talking about the difference between a pool and person is more down to earth than using more abstract terms.

Reorganing the work into book might convince people that my large number of posts are just repeating the same theme. They are expanding the theme.

Anyway, I can officially be labeled a plagiarist. I really hope to get the work published. If I do, I ask the readers of this blog not to tell the publisher that you read it here first.

Two Boomers Talking

Boomer A: "You know. My parents were great. They raised me, my brother and sister. They then raised our children. I've been thinking ... maybe I should settle down and take a stab at raising a few of my grand children."

Boomer B: "What? Are you kidding? I don't want to waste my retirement years rasing kids ... like my parents did. I want to be free in my retirement. I just hope Congress can hurry up and pass this Healthcare reform and give my parents a little bit of that end of life counseling as I am scared that they will shape up as a burden."

Tuesday, August 25, 2009

On Ted Kennedy's Passing

On hearing of the passing of Senator Edward Moore "Ted" Kennedy (1932-2009) I decided to read a few of the online biographies and eulogies to the Senator.

As my mind has been consumed with the health care debate, I was struck by the decade long push for government conrolled health care. The push was well underway before Kennedy's rise to the Senate. I simply remember Senator Kennedy's efforts as they happened with my lifespan.

In school, I was taught that the Camelot era was the high point of American history and I adored Kennedy. For that matter, the only two politicians that I can remember adoring were Teddy Kennedy and Jimmy Carter.

In college, I was indoctrinated into hating Reagan with all of the fervor that today's students hate George W. Bush. Reagan is the only politician I ever actually hated.

I moved away from Kennedy's point of view while working for a state run insurance agency. I realized first hand that a bureaucrat does not provide health care. Doctors and nurses do that.

A better system is one that helps people build resources for their own care as a direct relation between provider and care giver is healthier.

I say this as I've come to view the Kennedy legacy as a great American tragedy. I see Senator Kennedy as a man who spent his life trying to solve problems with politics that are better left to different devices.

Kennedy's half century influence in health care has had the direction of greater centralization and the systematic destruction of all alternative means of health care funding to big insurance.

As the press starts its eulogy of Senator Kennedy, I hope that people realize that the status quo (with health care burdened by the yoke of private insurance) was a product of a single minded focus on centralizing and regulating care.

The great danger of populist giants is that the giants lead us to think that centralization of the economy is the path to progress, when real health care is the care that takes place silently by the bedside of those in need.

If my believe is correct and health care takes place at the bed side and not in the halls of Congress, then I see the passing of the most influential Senator of all times as a great sorrow in that his great influence was detremental to an issue he cared about ... quality health care for all.

A Retweet on Immigration

I am repeating a recent point.

There are no moral or ethical problems with undocumented workers buying private insurance or even with people putting money in a savings account.

There is none what-so-ever.

It is actually a net-plus when people from around the world travel to the US for healthcare as these prime customers help us afford a better healthcare infrastructure.

The problems of illegal immigration and health reform arise when one discusses the public option, co-ops, or when people are coerced by government to buy insurance.

Extra-nationals are able to pop in and out of such pools in ways that destabilize the health care for the citizens in the pool.

The difficulty of immigrants and healthcare reform efforts are a strong sign that the reform effort is headed in the wrong direction.

Monday, August 24, 2009

Transitioning Health Records

The two party system seems to bring the worst health proposals to the forefront.

This happens because the core of both parties have a stake on centralization. The insiders of the Democratic party want highly centralized big government. The insiders on the Republican side want highly centralized big business.

Newt Gingrich's ideas about health care reform appear on Gingrich's ideas of reform center on technocrats creating a highly centralized technocratic medical records system that will given big medicine a decided edge over small medicine. Our health would somehow magically improve as the technocracy completes the process of weeding small providers out of the system.

I believe that improved handling of medical records is key to health reform. However, I am not a fan of Mr. Gingrich's technocratic vision.

As I have explained in previous posts, the problem with health records is that the records are in the hands of third parties. Our health records follow the money. Since we pay for care with third party pools, our records end up jealously guarded in the hands of these pools.

My solution to health record reform is to create the paradigm where individuals own their health records. Individuals would use a new class of service agents called health advocates. The health advocates would help people budget for their care and would create a repository for health records.

The health advocate is a clerical position. They would number in the tens of thousands all competing for your business.

This class of health advocates would create a paradigm in which there would be a rapid evolution of medical record technology. After all, which health advocate would you choose for storing your health records? People would choose health advocates based on their ability to guard records from prying eyes while making the records available to health care providers when needed.

Transitioning to a system of self funded care with independent health advocates would be a little bit like the internet. The rapid evolution that we saw in internet technology is the result of hundreds of millions of people with computers anxiously working to get connected.

A government of technocrats could not have devised as rich and robust solution.

What we need for rapid innovation in medical records technology is a structure that allowed indpedent evolution of a system.

The top heavy technocracy favored by Gingrich would not be as robust as a system that would evolve in a paradigm where individuals owned their records and sought private technology to help them make the most of their records.

Immigrating for Health Care

I wanted to expand on a Tweet I made over the weekend:

In a market where people paid cash for #healthcare; People would be treated equally regardless of immigration status.

America's vast population of undocumented immigrants is the largest block of uninsured Americans. They are also the most underserved population in the health care system. Even when an undocumented immigrants are covered by insurance, they are unlikely to receive the full benefits of their policy.

It is easy to intimidate illegals away from using services. If you cost too much; You get deported.

A system of self-funded care would not have the same inherent inequalities. An illegal immigrant paying cash for services would be as welcome as any other cash paying customers.

The large number of people who travel to the United States specifically for care provide a case in point. For that matter, people traveling to the US for health care have a positive impact on the balance of trade.

The fact that illegal immigrants are treated as burdens by third party pools is a sign that systems of pooled insurance are not the ideal mechanism for funding health care.

When we surrender our health care to a third party pool, we make the quality of our care dependent on the financial health of that pool. The financial health of pools depends on the balance of healthy and sick within the pool. A pool with a relatively high ratio of healthy to sick thrives. One with a low ratio of healthy to sick perishes.

Pooled insurance creates the vehicle for the politically powerful to manipulate the make up of pools. When politicians are able to shift people from pool to pool they can reward friends and punish enemies in the industry.

The long and sullied tradition of gerrymandering shows that politicians are not above using populations for their political ends. For that matter, there is long and sullied history of war in which generals burden their opponents with large numbers of sick and injured.

Pooled insurance creates a vehicle for political manipulation of populations.

As I recall, the US has only about 5% of the world population, meaning we have only 5% of the sick and elderly. With pooled insurance and lack immigration control, it is possible for the power players of the world to thrust their sick and elderly on us in a game of international politial war.

Problems exist dometically, a central feature of HR3200 is the creation of committees of unelected bureaucrats that can manipulate insurance pools by forcing pools to take on policy holders that they would not otherwise accept.

The status of undocumented workers in pooled insurance is problematic as they are a population easy to manipulate and bully about. The political class can force illegals to buy insurance when they are healthy and shove them out into the cold when they are sick.

Illegal immigrants can also be used as weapons of business war. If a politically connected player can foist a large number of sick illegals on the pool of an enemy, then they can swamp the pool.

HR3200 turns the healthcare of the people into a big political game with political insiders jockeying for control over the definition of health care pools.

I dislike when President Obama stands on the stage and claims that illegal immigrants are not part of the HR3200 health care reform effort. If the most underserved segment of the population in this nation is not part of the effort, then the effort is bogus.

If his statement is true and illegal immigrants are not included in the HR3200, then passing HR3200 will make real immigration reform even more difficult as the reform will suddenly be driven by the cost of including illegals immigrants in our nation's health pools and not on questions about what is best for the immigrants.

Our system of using third party pools adds a very ugly dimension to the immigration debate. Our growing dependency on pools makes people see immigrants as a threat to the health care.

The fact that Obama is not eager to talk about how health care reform will affect the most underserved segment of the population tells me that pool insurance is the wrong direction for health care.

Conversely, I believe that a system of self-funded care is the best mechanism for undocumented workers as the funds they are able to use the funds they save for care without fear of retribution.

I realize that this post is convoluted. In systems of pooled insurance, the transient population becomes pawns. In a system of self-funded care, the transient population is able to build and use health care resources on a more equal footing.

IMHO, the mistreatment of transient populations by pooled insurance is an indication that pooled insurance is inferior to self-funded care.

Sunday, August 23, 2009

Crossing State Lines

Several Republican leaders have suggested that the best way to reform healthcare would be to allow people to buy health insurance across state lines.

I believe that this would be a very bad direction to take reform.

The reason for my position is that insurance is a contract for care. To ensure that a customer receives care, they have to be able to sue the insurance company in their local district.

Anyone looking at the dirty workings of insurance discovers that the industry is an ugly nexus of lawsuits with insurance companies and care providers in ongoing battles of claims and counter claims.

The very terminology of the game gives this away. When the insured visits a doctor, they do not pay a bill. The insured issues a claim against their insurer. There is a later settlement between the doctor's lawyers and the insurance company's lawyers.

Allowing people to purchase insurance from across stateliness introduces jurisdiction problems into the dance of issuing and settling claims.

Of course, the state boundary issue is far less of an issue for the Medical Savings and Loan. The policy holders negotiate and pay their bills in cash eliminating the need for the complex claim structure of insurance.

Since insurance involves a complex claims process between multiple parties, I think it is unadvisable to allow people to buy insurance from different states.

I believe the difficulties of portability simply show that pooled insurance was a bad idea from the beginning. Rather than coming up with increasingly complex regulations and tax breaks designed to make a bad idea work, I think we would be better of scrapping insurance as the primary means of funding health care and return to a more civil day of direct negotiations between doctor and patient.

Saturday, August 22, 2009

Public Loans

It would be possible to create a system where everyone has access to medical care through a system of public loans.

The basic idea is that if a person showed up at a medical facility with a health problem, they would get a loan financed by the government. On taking the loan, the person is immediately slapped into a medical savings and loan structure for repayment.

The cost to the taxpayer is the interest on the money, plus the default rate on the loan. This is substantially lower than the cost that incurs when the public finances the care in full. The benefit is that it forces people who've failed to account for their medical needs into a structure that will force them to start account for their needs.

NOTE, the federal government is not the only stakeholder in delivering needed care. The hospital, state and local governments are generally concerned with seeing that basic care is available to all. If a hospital makes a loan, you would probably want the hospital to own the first 50% of the loan, the state to own 25% an the federal government 25%.

Friday, August 21, 2009

Townhall Smackdown

The site Recess Rally wants there to be anti-Obamacare rallies in all Congressional districts on August 22nd. There are rallies in all States.

I doubt they will be highly attended. The people in the opposition aren't the rally-attending kind.

HR3200 is rife with payoffs for all the politically active groups.

Congress likes to balance the deficit of such bills on those who are usually too busy working and living to get involved. Progressive politicians have a special fondness for balancing accounts on the backs of children as they can't vote.

Attending rallies is always a hit or miss operation as well.

People rally behind politicians who claim to represent a freer and fairer world. The politicians usually end up being nothing but politicians in the end.

While I worry about the people who are trying to build political futures on the teaparties and recess townhalls, I have to admit that I find myself applauding this round of civil discontent.

The media has invested heavily in efforts to deride the teabaggers and buffoons incapable of carrying on civil discourse. I think the actions of people are appropriate in response to recent events.

The townhalls were not planned as part of an effort to poll the American people on ideas. The goal of the 111th Congress was to steamroll the bill and have it in place before the August recess. The committees spent so much time loading the bill with their speical goodies that they failed to make the break.

In this health care debate, Congress attempted a monumental power grab. HR3200 greatly centralizes the delivery of medical services and creates around 50 new centralized bureaus that can be used to award political cronies with high paying jobs. (Like the $317,000/year political position that Michelle Obama had at the U of Chic Hospital).

The townhalls were not planned. They were thrust upon Congress. As they were not part of a structured system of civil discourse, I would not expect them to be anything other than political rallies.

Barney Frank scored big points this week for comparing the intellect of his opponents to his dining room table.

If the townhalls were planned as part of an attempt to gather information for health care reform, I would be appalled at the low level of discourse. However, as they are primarily a sign of a frustrated people tired of being treated like floor mats, I believe they are a good sign.

Being likened to a dining room table is a step up for those used to being treated as doormats.

Textbook Innovations

In my web building programs, I've noticed that there has started to be a number of great innovations in the textbook market.

Campus Book Rentals and are programs that rent textbooks online. Renting is a good alternative for cash strapped students as you don't tie up your cash buying then reselling books each quarter.

CourseSmart is an effort by textbook publishers to go digital. With this program, students can download electronic copies of textbooks at prices substantially lower than for hardback books. The program saves trees. Above all, electronic books are easier to move about. I lived in my car during my college years and had to sell books 'cause there's only so much room under the front seat.

In the K12 market, I've noticed through the years that many of the most interesting innovations seem to be happening on the homeschool front and with private schools as individuals and small businesses rush to find quality learning materials. This industry is way too big for me to sum up.

The other cool innovation that I think will completely swamp the textbook world is growing number of open source textbooks on the market. The great thing about open source is that it will allow professors to grab a curriculum for their class and embellish it.

I love things that actually empower professors.

I've downloaded a read a few open sourced math books. But have only scratched the surface of what this innovation might bring to the world.

Thursday, August 20, 2009

Morality and Healthcare

Forgive me father for I have sinned. Today I committed two cardinal sins: I bore false witness and spoke Obama's name in vain.

I bore false witness by having different political opinions than the one. I compounded my sin by taking Lord Obama's name in vain.

For that matter, my eyeballs curled up in their sockets when I heard Obama casting moral disparagements on those with different political views.

As we are on the topic of sin and virtue, I thought I would quickly pen my moral views on health care.

I support a system called the Medical Savings and Loan. This system gives people the tools to help them self-finance their care. The central feature of the medical savings and loan is a savings account in which people save resources for medical expenses. The system also contains interest free loans that people can use if the cost of needed care exceeds their current savings.

My belief in this system is founded in part on the observation that man is created in the image of God. People have both needs and the ability to care for the needs of others.

I observe that the vast majority of people are capable of self-funding their care during their life. The creation of a system would allow these people to live happy, long fulfilled lives without being burdens on others.

Having separated out those that can care for themselves, society would then be in a position to better administer to the needs of those who cannot take care of themselves.

In my belief, a system that asks people who can take care of themselves to do so is not immoral, nor is it inherently greedy.

Such a system allows those who can be strong to be strong. A well structured system will help the marginal become strong. The strong can then carry the weak.

I strongly disagree with systems that take resources that people need for their care in the name of social redistribution. In such a system, the healthy become marginal, and the marginal become weak. When healthcare is distributed by the government, the people of the nation are rendered into dependency.

Giving healthcare is an ounce of charity. Taking away care is a pound of villainy. This is why the scales of history tend to weigh against socialism.

I view the centrally controlled politically charged pools in the Obama plan as an abomination that takes health care from some and gives it to others based on the political whims of the administrators.
While I was not put on this planet to be the moral judge of others, it seems to me that denying a person healthcare resources that they had been paying for is sin that cancels out any benefit of the delivering those resources to another.

The Bible tells us that God created man in his image. God did not create government in his image. If God had created government then there would be perfect government. There has never been perfect government in history. The closest that anyone got to perfect government was the severely limited government created by the Founders of the United States.

While Obama denounces his political opposition as sinners, I humble myself before you as an unrepentant sinner.

Healthcare Bubble

Two years ago, few people felt that there could possibly be nationwide correction in real-estate prices. Real estate goes up in price. Always had. Always will. The people who bought with this assumption discovered the hardships of being on the downside of a bubble.

Last year saw an energy boom and bust. Before that we so a dotcom boom and bust.

An insane mix of investment tools and government meddlings appears to have put all sectors of the economy into boom and bust cycles.

Currently, we have a situation where the price we pay for health care is multiples of the cost of actually delivering the care.

The Bush administration expanded government spending at the fastest rate since LBJ. The spending included major expansions of SCHIPS and created programs for prescription drug coverage.

If we are in a bubble, then no matter what the government does, we will probably see lower prices for medical care in the future.

BTW, one way to tell if an economy is in a bubble is to look at the willingness of industry leaders to look toward government for help. In a rapidly expanding market, industry leaders are hostile to regulation. As the market becomes saturated, industry leaders turn progressive and start demanding regulation. As the bubble crash unfolds, industry leaders ask the government for bailouts or actions to create false demand.

The fact that big health insurance, big pharmacy and big medicine are all on board with this so-called "healthcare reform" is a strong indication that the medical bubble is on the verge of bursting.

I contend that, if we did nothing, prices would fall further than if we pasts the plan.

If free market radicals pulled their care from the insurance companies into health savings account we could see an epic drop in the cost of healthcare.

The Gormogons: What Does a Health Insurance Policy Cost?

In The Gormogons: What Does a Health Insurance Policy Cost? examines the cost of extending the prepaid medical plans of Blue Cross to everyone in the country.

Not surprisingly, the answer is that the idea is impracticle.

The writer then concludes that life is such that many most go without access to health care.


He has the conclusion wrong. The correct answer is if the insurance model locks a large number of people out of the healthcare equation, then insurance is fundamentally wrong.

The Medical Savings and Loan concept pushes us close to universal coverage. It is a structured medical payment system that helps people self-finance their care.

There is only a very tiny number of people who are completely incapable of participating in the economy who would need total care. The medical savings and loan pulls separates this group from the rest so that they can be handled by charity or government programs.

The insurance model is inherently flawed. Out of the box thinking tells us that if we want to improve things we must find a way out of the flawed model.

Unfortunately, progressives are wed to the the notion that the Soviet Union was the pinnacle of human existance. Through the years progressives have led the the way in political movements that shove ever greater portions of the population into insurance thinking that a social utopia will somehow sprout forth as insurance moves from the state of corruption of healthcare to total corruption of health care.

Those supporting the American tradition should realize that if the model is flawed, then we need to rid ourselves of the tax incentives for insurance and develop programs to facilitate self-funding of care.

Tuesday, August 18, 2009

On Back of the Napkin Calculations

I was disappointed with the Back of the Napkin presentation on health care.

The value of back-of-the-napkin calculations is that they can help you find false assumptions and hidden errors in system design. Engineers often use the process to check the thermodynamics of a situation. Physic processes tend to preserve mass and energy, a quick calculation can let you check to see where all the mass/energy goes.

The process is helpful in accounting. Figures are supposed to balance out; so it is wise to simply check what goes into a process to what comes out.

The subtitle of Dan Roam's book is "Solving Problems and Selling Ideas with Pictures"

The book is about using images to sell people on ideas.

The Digital Room site completely misuses the traditional back-of-the-napkin methodology. Rather than real analysis, the site shows how you can use drawing on a napkin as a propaganda tool to repeat partisan themes. The web designer provides a nice example of how one can use image driven propaganda for partisan attacks.

The presentation started out correctly with the observation that our current problems are the result of injecting a third party between patients and their doctor.

Unfortunately, like the health care debate itself, the presentation quickly loses track of the patient and focuses entirely on the insurance side of the debate and jumps into convolutions about the merits of private v. public third party pools.

A true back-of-the-napkin would stop on that first napkin and realize that all third party payment systems are inherently flawed. As these systems consume resources, the systems will always return less money than shoveled in.

A third party must justify itself by either providing an efficiency which covers its cost, or by providing a benefit that justifies its existence. Insurance does neither.

A second napkin in the presentation shows that third party financing is a net negative in that third party pools create conflicts by pitting parts of the system against itself.

So, not only do third party pools fail to add efficiencies, they create inefficiency and conflict.

This is true of both government owned and privately owned insurance pools.

The rest of the presentation is partisan non-sense. The propagandist drivel is that conservatives don't want to see any improvements in health care. They forced the public option off the table leaving us no good choices.

I am used to partisan drivel.

The form of this drivel irks me.

First the statement that conservatives don't want better healthcare is way off base.

The opposition to the current round of healthcare reform is from people who see the reform headed in the wrong direction. The loudest opposition are people who read the back-of-the-napkin correctly and realize that the tiff over ownership of the third party pool is just a diversion.

Anyone familiar with insurance and who read the bill would realize that the bill was one great big grab bag for big insurance. Shove this into your back of the napkin calculating machine: Forcing everyone to buy insurance does what:

  • Decreases the amount of money made by insurance
  • Increases the amount of money made by insurance
  • Causes butterflies to issue forth from our belly buttons
  • Puts really big bribes (err, I mean campaign donations) into the pockets of politicians

Oops, there were two right answers in the diatribe. I am not a good test writer.

The idea that Conservatives are the ones most invested in the status quo is absurd as well. The status quo was the product of some 60 years of progressive-liberal thinking.

The status quo that we are led to despise gave Michelle Obama a $317,000/yr political job in a hospital.

The people who are writing healthcare reform are the primary beneficiaries of the complex centralized system that they wish to put in place.

The insurance companies have bought a large number of Republicans, but, from day one, it was the progressive liberal who led the charge in creating the top heavy status quo.

Anyway, I wish that people do real back of the napkin calculations on all the health care reform debate. Remember that simply because words appear on a napkin does not mean they are propaganda.

If you really want to engage in back of the envelop thinking, you might try some calculations on the Medical Savings and Loan. This system pulls the insurance agency out of the system by having people self-finance their care.

Enhancing the MS&L with Public and Charitable Care

The goal of the Medical Savings and Loan is to break people of their dependency on third party care. The MS&L goes beyond Health Savings Accounts in that the system uses health advocates to work with people to create a model of expected health care expenses. This budgeting guideance will help people maintain their optimum health.

The savings and loan aspect of the program will handle all anticipated health problems. One can add a low cost insurance to handle true exceptions.

There will be a small number of times when healthcare advocates sit down with a patient and realize that their income simply can't cover medical expenses.

As the healthcare advocate has complete models of people's anticipated health care expenses, we will be able to easily classify the exceptions which can then be handled through either a charity or public agency.

Don't you see? If there is an established system in which each of us sits down with a healthcare advocate to model our expected health expenses, then we would have solid data on what we need to do to care for ourselves and families.

This solid data from this analysis can be used to create mechanisms to supplement the needs of those with health expenses fall outside the norm.

Knowledge empowers. Ignorance destroys.

Third party systems (including private insurance and government pools) lack this intelligent process and consequently promote ignorance.

The pooled mechanism tries to hide the exceptions with large numbers.

This absurd attempt to hide exceptions creates a dynamic where people strive to gain the system. Insurance companies gain the system by finding ways to expel high risk customers.

Even worse, people try to hide their risks in order to get lower price on insurance.

The MS&L (with its healthcare advocates and progressive mix of health financing tools) directly empowers individuals with knowledge about themselves and knowledge about costs and alternatives within the health care industry.

Monday, August 17, 2009

Offcial Records

I am penning a few posts on different perspectives of medical records. Which would you rather be? The author of a blog post, or the author of a book?

Which would you prefer: A doctor whose trolled the internet or one that has a pretty solid library of reference books?

Which would you rather have: Medical records on paper or in a computer file?

I happen to hate paperwork. I don't subscribe to paper newspapers, or magazines. I do all of my banking online and hate tax forms.

Oddly, when I deal with the most precious piece of information about myself, I prefer to see it on paper. I love to see the big thick folder with paper from different sources, with hand written notes, all written with concern.

Of course, it is a false dichotomy to say that we must have either electronic or printed records. One can print out data files and digitize forms.

The paradigm I would prefer is one where there were printed official files and electronic versions of the data that could accessed as needed.

Where should the files be stored?

Traditionally (prior to the days of big insurance) the data was stored with the primary care physician. The clerical work is the waste of a good doctor. So, it really would make sense to have a class of clerical workers who store the data. We could interface with this person, then leverage that person's knowledge to help interface with the world.

Medical Records

It's worth restating the post on medical records from the point of view of a system engineer.

There is a major push to create a national system for electronic medical records. The reason for the push is that it is a challenge for doctors to get to the data that they need to know about the patient.

Before undertaking a monumental effort of creating an electronic version of the status quo, one should look at the problem as ask the basic question: Why aren't health records organized around the patient in the first place?

If we formed the system of medical records around the dictum "Know Thyself" then we would realize that the patient is the proper owner of their medical records.

Therefore, the ideal health information system would be one that simply made the patient the owner of their medical records.

The Medical Savings and Loan creates a new specialty that I called Health Advocate. This health advocate would be charged with storing medical records for individual people. The advocate would also help with budgeting and planning medical expenses.

So creating a system where the money flows from the patient and the paperwork flows back to the patient, we solve the problem of medical records.

In such a system, it is no longer important if the records are stored in paper or as magnetic charges on a disk. In this system, the health advocate becomes an object that can deliver a patients medical data to a health care provider regardless of the form of the data.

A skilled system engineer knows that it is better to redesign a flawed system from the fundamentals than it is to impose expensive new technology on a broknen.

A quality debate on healthcare reform would start with a push to place greater regulations on a broken third party payment system, but should be about finding patient centric solutions to our health challenges.

Combining Wits

Progressivism (ie mob rule) is founded on the notion that if you combine two half wits, you will get a whole wit.

Unfortunately, they fail to realize that the combinition of wit is really a multiplication function (½ * ½ = ??). When half wits multiply, we get absurd things like HR3200, Cap and Trade, Credit Default Swaps, naked short selling and a public education that fails to educate the public.

Sunday, August 16, 2009

Leveraging Our Health

The economy of the last several decades has been in a cycle of booms and busts as different sectors develop bubbles that burst.

The bubbles are generally caused by people taking out leveraged positions against equities. For example, a mortgage is a leveraged play against the value a house. The Credit Default Swaps that came into law in the last days of the Clinton Administration created a pirate trove of ways for banks to further leverage mortgages.

Insurance (links) is a product of this same type of thinking. People buy insurance with the hope of leveraging against the group for their health care needs.

Insurance companies use their policy holders to gain leverage to create a dominant position in the healthcare market.

Insurance companies use a formula where by they take a percent off the top of total healthcare spending. Not surprisingly insurance companies are the primary source for many of the inefficiencies that jack up prices in our current market.

This is the way bubble economies work. People with highly leveraged positions introduce inefficiencies to increase their profits until the system comes crashing down.

Most health reform efforts, including HR3200, were written by insurance lobbyists in concert with lobbyists. These bills systematically favor insurance companies over self funded health care.

The primary aim at HR3200 is to force everyone into a third party payment system. This effectively forces everyone to leverage their health care resources in ways that are unhealthy.

Saturday, August 15, 2009

Notes on the Non-Debate

HR3200 was a grab bag of treats for big insurance. The program forces everyone to buy insurance, but shuffles off many of the really bad customers to a public plan or to competitors without the well greased connections in Washington.

To pass the Bill, Obama has been framing the opposition as shills of the insurance industry. The Democratic super majority will then sit down with insurance company lobbyists. Come up with an even sweeter deal for insurance companies with even more of our healthcare dollars diverted into campaign donations for 2010 and 2012.

Having framed the Republicans as shills of the insurance company, the Democrats will then come out an treat the even sweeter deal for insurance companies as some sort of compromise with the teabagging mobsters.

A compromise with the image that one projects on others is not really a compromise, now, is it? A compromise with the image projected on others is a form of self-delusion.

I find Obama to be extremely frustrating. He is really good at picking up on the problem.

Obama is 100% right that there is something dreadfully wrong with third party payment systems.

The answer is to find ways to get people's healthcare dollars out of the hands of third parties and into the hands of the people so that they can directly negotiate with their healthcare provider.

Obama could be a great president. But he was trained in left leaning schools rife with Marxist thought. The problem with this type of thinking it that it clouds one's thoughts. They see issues in terms of conflicts, enemies and friends. It destroys the ability to look at the problems and find a real solution.

At this moment, Obama appears to be defining the insurance companies as the enemy. He appears to be projecting motives onto the opposition.

Rather than taking this approach, I wish he would look at the long history of health care reform. It has been a steady drive to give insurance companies tax breaks and subsidies so that they can crowd out other methods of funding health care.

If we hate the status quo, shouldn't we look at reversing the decades of insurance reform that led to the status quo. The status quo is a convoluted system that heaves tax breaks on employer based insurance. This status quo created the artificial dependence on third parties and has inflated medical costs.

To break this status quo, we need politicians who can look outside the little boxes created by the indoctrination at our partisan universities.

It is so frustrating to watch an intelligent person march down the wrong path because he failed to rise above the filters created by the education system.

You Are the Primary Key to Your Health Records

You are the Primary Key to your Healthcare

There is great hope that information technology can help reduce costs and improve healthcare.

Our healthcare providers, insurance companies and government bureaucracies have terabytes of health information. One cannot help but look at the mess and think that if there were just a way to organize it; one could turn this trove of data into a treasure chest of information.

Unfortunately, there are several roadblocks include accuracy, access, security and patient privacy.

Many of the problems start with privacy. One quickly realizes that people seeking to mine health data may nefarious motives. Marketers would love to have a go at health information. Political operatives could use the information to punish enemies. The police could use health data to catch criminals in computerized dragnets.

There has already been a number of scandals involving health personnel gaining access and selling the medical records of celebrities. How many times has someone made unauthorized access to your records?

Patient privacy is only the tip of the iceberg. The entities that made the major investment in accumulating this data have their own proprietary concerns. Corporations and even government agencies are jealous of their data and resist competitors coming in and snooping on the data.

It is harder to create a really good security system than it is to envision one. Even worse, there is always the fear that the people who created the security system left a backdoor.

Gaining access is just part of the problem. Having gained access to data, one will find the data stored in a variety of formats.
One of the biggest challenges of all is that people are mobile. As people move around in seemingly random fashion, it becomes very difficult to match up records to build a complete view of a person.

Many of the problems center around finding a good primary key to identify each person so that the people accessing the information can reassemble the records. It is common for people to make errors in recording social security numbers. A patient might intentionally give a wrong social security number. This messes up two sets of records.

The problem of making sense of the nation's health records seems insurmountable until one steps back and realizes the greatest truism in medicine:

Each person is their own primary key.

As I understand, good doctors don't depend solely on the paperwork. They often mark the body. For example, before amputating a foot, a doctor will mark the leg and will double check that mark before doing surgery. It is possible for paperwork to get shuffled, it is better to depend on the physical being.

The goal of the Medical Savings and Loan is to make each person the owner of their health resources. A consequence of this paradigm is that people end up owning their health records.

The flow of paperwork follows the money. When an insurance company or government agency picks up the bill, the information flows through that agency and become part of their proprietary record keeping system. When the money flows through accounts owned by the patient, the paperwork goes into the system used to pay the bills.

In my last post I introduced the healthcare advocate. This person helps policy owners set up the budget for their medical expenses. The advocate also helps the clients organize their medical records so that each person has a structured view of the health services that they've purchased through the years.

I wish to emphasize that the advocate simply accumulates and stores medical records. The records themselves are owned and controlled by the patient. So, if a person decides to leave a medical savings and loan, they can take the money they saved and their medical records. This is different from insurance where the medical records are proprietary to the insurance company.

By accumulating the data for each place in a common location owned by the patient, the Medical Savings and Loan effectively bypasses all of the roadblocks that exist in the big-insurance/big-hospital system. Since an accurate medical history sits in an accumulation owned by the patient, relevant data is already joined and checked for accuracy by the health care advocate.

As the data is owned and stored in a location of the patient's choosing, the system provides the security needed to protect privacy and allows the patient to control access.

On realizing the simplicity with which one can store and access medical records from multiple providers in the Medical Savings and Loan, one can't help but reach the conclusion that insurmountable obstacles that sit between us and our medical records indicates that third party payment systems are inherently unsound and that a patient centric healthcare model like the Medical Savings and Loan would be more sound.

You are the primary key to your health records. The ideal health information system is one that attaches the records to you. Third party systems treat make your health care data proprietary to the third party. A direct funding system would restore the balance and make you the owner of the data about you.

Friday, August 14, 2009

Introducing the Healthcare Advocate

I wrote up a quick article called the Healthcare Advocate on the Medical Savings and Loan site.

My thoughts on the issue are as follows:

A Medical Savings and Loan cannot auto-approve all loans or medical expenses. For example, it would need to prevent people buying a car with a medical loan.

There has to be a bureaucratic layer in the process. My mind turned from wanting to eliminate a bureaucracy to the question of making a bureaucracy that works for the policy holder.

When I worked in the insurance industry, I developed great respect for the claims adjusters. These people learn all of the ins and outs of the system. The problem is that their knowledge is spent in the benefit of the company and not in the benefit of the client.

It dawned on me that, in a medical savings and loan, money flows from the client. As such, the claims adjuster would evolve into the role of a healthcare advocate. The goal of the advocate is to help you fit your healthcare needs into your budget. Rather than denying claims, the advocate would take the tact of talking out of spending your money poorly.

A good advocate would be more than a naysayer. The advocate would be trained to see your life as a continuous entity. A good advocate would talk you into spending on care that reduces long term expenses.

The health care advocate would have detailed knowledge of the health expenses that we will all face and would spend a great deal of time with clients in the medical savings and loan on budgeting and balancing their care.

Readers of this blog may have noticed that I've given a great deal of praise to a profession called "The Doula.' The doula can be seen as a lay position that helps mothers in the birthing process. These are trained professionals who help expecting moms with all of the stuff surrounding birth including birthing classes, post-partem depression, etc.. A good doula provides assistent and support for the mother, but avoids getting in the way of the real medical.

I imagine the position of claims adjuster evolving toward the doula model. The system might even evolve to the point where the health care advocate is a nurse practicianer who can deliver primary care and really help clients delve into their medical records and take a more active role in their health.

The Healthcare Whisperer demonstrates the type of thing that would be common if we could just break the political obsession with third party payment systems and return to self-funded care.

Hannity and Rush Poison the Well

Grumble, Grumble, Grumble.

I watched part of the YouTube special where Hannity pulls out every propagandist tool in the book to tag Obama with the labels "Marxist" and "Radical."

Doesn't Hannity know that he is poisoning the well and making it impossible to have open discourse about why the ideas behind radicalism and Marism are flawed?

Marx was the most influential philosopher of the last 200 years. If Hannity had a clue, he would figure out that his education and his position were deeply influenced by Marxism. He would realize that reactionaries bear and imprint of the methods they react against.

Half-witted Hannity is like an RNA molecule that dutifully replicates the structure of a DNA molecule.

You can't defeat Marxism with Marxist style propaganda. You simply create a pattern that replicates the malady.

If there was open discussion about Marxism, then we could figure out what is wrong and find away to solve the problem. But there can't be with loud mouth reactionaries dominate all such discussions.

Building Clinics

MyFirstAmendment twitted me the question:

"Mr.Delaney, your idea is great; could it be adapted to provide the loans 4 entrepreneurs 2 start own healthcare company?

I balked at first.

Insurance companies used the funds invested by their policy holders to build monstrosities called HMOs (Health Maintenance Organizations). These massive institutions would have a monopoly on the care of their policy holders. HMOs are great at delivering untold profits but are horrid at delivering care.

My gut reaction is that people should avoid having the health care funding system owning the health delivery system.

Yet as I tried imagining an MS&L making investments in clinics, I realized that such clinics are likely to be more like buyers' coops than the industrial HMO created by insurance companies.

The dissatification that people have with HMOs was the result of the tight command and control profit structure of the insurance paradigm. Clinics funded by the Medical Savings and Loan are likely to reflect the more loose knit structure of the funding device.

Having the funding mechanism for health care directly investing in the health care delivery mechanism is only problematic when the system is owned by a third party.

The ability of a Medical Savings and Loan to invest in new clinics is a wonderful way for people to overcome weaknesses in the current infrastructure. My thought experiment on this matter seems to further my belief that we should move from the insurance model to the MS&L model.

Building Clinics

The question linked to an article by Kellen Smith suggesting that the path to health care reform would be more direct funding of clinics. Sadly HB3200 requires that clinics built on prepaid plans (etc) be regulated like insurance companies. The bill before Congress effectively makes Mr. Smith's idea untenable if not outright illegal.

Thursday, August 13, 2009

The Calculus of Altruism

carnival photo

One of the tricks of modern dialectics is to question the motives of their opponents in a concerted effort to frame the image of small-minded Capitalists motivated by greed facing broadminded Marxists motivated by altruism.

This method is effective in drawing people to the cause. However, the cause does not put people on a path to a better world.

In the physical world, one's actions have a greater impact on wellbeing than images projected by the media or of the virtues and vices that we imagine lie behind the scenes.

Actions are more important than motives. A person motivated by greed to do good things does well. A person motivated by altruism to do evil, does evil.

A doctor who saves lives for money is a lifesaver. A revolutionary who kills to redistribute income is a murderer. The motivation does not define the morality of the act.

It is common for people to feign altruism to demand a redistribution of resources. However, altruism with another person's resources is often but a higher order of greed.

Greed at an individual level rarely does much harm. When a greedy person is restricted to power over his own resources, then he will take to optimizing those resources which benefits society.

Greed only has a negative impact when the greedy person has undo influence over others.

An altruist is a person who wants to do good for others. The altruist's greed is a desire to affect as many people as possible. The altruist often does harm by seeking and gaining undo influence over others. Driven by a desire for power the altruist sets up society for impoverishment by future scoundrels.

It is greed at the societal level that wreaks havoc. It is the greed that leads people to feel that they must dominate that leads to depravity. Claims to altruism are often masks worn by those pusuing this higher level greed.

The question of motivation becomes even more complex when one realizes that the world is multidimensional. An act of altruism within a family might appear as greedy to others in the community. An act that appears greedy to the local community might be seen as altruism to the world.

In the political world, it is common for influence seekers to feign altruism to advance a political career or agenda. The politician's altruism is greed in a different dimension.

It takes an advanced calculus to describe the complexity of motivations that go into insurance, politics, religion or other fields that we associate with altruism or greed.

My last post brought up questions about insurance.

Insurance companies package and sell altruism as a product. They calculate a risk for a population then sell the promise of helping those affected by the risk. For the most part, insurance companies are true to their word.

Well run insurance companies make a profit. They often re-invest that profit to find additional risks to cover. They are driven by a profit motive to find other people to help.

Insurance provides an opening to discuss the complex interplay of greed and altruism at the individual and community level. People seeking protection (greed) created a community based organization to act altruistically. Insurance companies expand by selling altruism as a product.

This all seems well until you realize that there are strange things going on with multiplicity.

There is a many to one relation between individuals and the group. Insured pools often involve hundreds of thousands of in the group.

Participation in such large "altruistic" groups invariably results in a concentration of power and wealth that would not otherwise exist if people invested their own resources and engaged in more direct private altruism.

The calculus of altruism must take into account dimensionality and multiplicity. History is rife with altruistic efforts which accomplished the opposite of the effort.

I believe that far too much is made of motivation in our discussions of politics and the economy. We cannot see into the minds of others. What can see is that some acts lead to prosperity and others to ruin. Adam Smith noted that societies with distributed decision making processes (full of people greedily optimizing their personal resources) tended to optimize their resources better than those with top heavy structures, regardless of the altrustic motives of the people building the top heavy soiety.

The argument for the free market is not that greed is better than altruism. The argument is that a system with distributed decisions making outperforms command and control systems. This is true regardless of motivation. Those who seek to impose command and control systems usually do so with a guise of altruism. Defenders of the free market must defend the greed projected on the individual.

Wednesday, August 12, 2009

Know Thyself

The secret to good health is the maxim "Know Thyself."

When the funding for health care comes from a third party, people are reduced to following strategies that can obfuscate the knowledge that would help them live happier, healthier lives.

For example, people will try to hide pre-existing conditions from insurers when they apply for plans.

People (sometimes in collusion with their doctor) are tempted to overstate illnesses when they make a claim to get full benefits.

When a person is dependent on a third party (be it public or private) the strategy the adopt to deal with the third party distorts the knowledge they need for optimum health.

Even worse, in efforts to control costs, a third party payer might block access to information that could really be helpful to an individual. As mentioned earlier, the paperwork follows the payment. Doctors and insurance companies share information that the patient does not see. In third party payment systems (like Obamacare), there is valuable information they might miss.

Conversely, when health care is self-funded, people have a direct and immediate incentive to learn about their health. People who self-fund care will want to know everything they can about expected expenses and preventative medicine so that they could control costs.

This issue comes to light with things like emerging genetic science. The self-funded person would be eager to know if they have a pre-disposition to any genetic disorder. The info would help them in budgeting. In a system of third party providers, this information is something that could cause a person to get cut from the role if the genetic malady was discovered by the provider.

Tuesday, August 11, 2009

The Diabetes Example

President Barack Obama lays out an excellent example for the Medical Savings And Loan (and against the Pelosi health care reform plan) in the youtube video below.

In the video, Mr. Obama tells how doctors constrained by third party payment systems often end up making decisions that are not in the best interest of the patient. His example is that the health care systems (LIKE THE PROPOSAL CURRENTLY BEFORE THE HOUSE) where bureaucrats define items covered are extremely poor at given diabetics the valuable information they need to control their disease. Instead, the machine opt for the procedures approved by regulators.

Diabetes is a horrible illness that can be controlled through dietary changes, exercise and supplements.

But, guess what?

When people have control over there own resources and realize that they will need to pay $30k and have a foot removed if they don't shape up ... the greedy little people that the left despise will move heaven and earth to control their disease, save their foot and save the amputation fee.

The video below shows clearly just how we are underserved by third partyment systems and is a prime reason why people should reject outright the health care reform that outlaws self-funding of health care.

Insurance and the Concentration of Wealth

I believe that the distribution of capital is more important than the distribution of income.

If a society has an equitable distribution of capital, then an equitable distribution of income will follow.

A society with concentrations of capital develop great inequities in the distribution of income as the insiders are able to make off with the wealth of the nation.

The insurance industry has a negative impact on the distribution of capital.

In self-funded health care (eg the MS&L), people save resources in times of health for times of need. This creates a system where individuals hold a great deal of capital.

With insurance, people pool their resources for funding care. This pool needs to develop a large investment portfolio to assure it has money on hand for when it is needed.

The individuals who own insurance stop saving for future medical expenses.

The insurance industry creates artificial inequities in the ownership of capital which lead to inequities in the distribution of income.

If the health care debate gets people thinking about health care, and if people decide to reduce their dependency on insurance and opt for self funded care, then the society would start to reverse the cause for the inequitable distribution of capital and income.

Defenders of the Status Quo --- Not

Imagine the outrage that would ensue if Bush Administration had added a flash page to that was a partisan attack aimed at silencing political dissent.

The flash page says:

There is a lot of misinformation being spread by defenders of the status quo. Find out what's in health insurance reform for you, and what's not in it at all.

The black and white statement that everyone opposed to the bill favors the status quot is way off base.

The loudest voices are from those who oppose government meddling in health care choices.

What is the status quo anyway?

The status quo of 2009 is that health care is burdened by an inefficient government bureaucracy and the government controls the majority of spending in health care.

The only real change of the bill is that people who seek to opt out of the medical bureaucracy by self funding their care will be completely locked out, and that the bureaucracy will get larger.

Defeating the bill might actually do more to change the status quo than passing it.

The health care debate of 2009 has awoken people to the fact that they have no equity in their employer based insurance and that it can and likely will be wiped out by fiat.

The game of assigning motives to others is one of the most vile and divisive forms of misinformation.

I don't know the motives of people opposed to the health care bill. Since big insurance and big government are rewarded by the bill, I suspect that most the people opposed to the bill see it as an afront to the American tradition of freedom.

I know for a fact that I am not defending the status quo, but am hoping anger about the bill with get people to drop third party health care schemes and self fund their care.

Monday, August 10, 2009

Minimum Services

Section 122 of the bill defines minimum services offered by the bill. The bill demands coverage of Mental Health Services and Prescription Drugs.

Personally, I don't like taking drugs. Every time I've visited a doctor in the last few decades, the doctor has given me prescriptions. I challenged the doctor, and in most cases the doctor agreed that I did not really need to take the drugs; So, I did not take the drugs.

Personally, I believe a large number of drugs are overprescribed ... notably antibiotics and painkillers.

I find myself balking at the idea that I will be forced to subsidize a practice that I personally condemn.

I am by no means opposed to all drugs. The question is if the drug is core to the treatment.

Conversely, I happen to be a big believer in supplements and often cures in supplements or even dietary changes.

On the subject of mental health care, I know several people who use see priests for primary mental health and others who seek out a psychiatrist for spiritual fulfillment.

People have strong opinions about these aspects of their health. The bureaucracy that defines benefits will force people who lean toward natural care to subsidize those seeking industrial care.

The free market gives us some ability to seek out policies that help match our lifestyles.

A Circuitous Path to Totalitarianism

The key word in the current health care legislation is "ALL."

The driving force behind this legislation is to create a political hierarchy to which everyone is subject.

There is no opting out. There is no self financing of care. There is no escape from the machine.

The program creates a top heavy bureaucracy with unelected officials deciding what care people receive. In many cases, these unelected public boards will dictate the form of care with little input beyond their lucrative contact with lobbyists.

Had our second rate public schools taught us basic logic, we would realize that a program driven by a desire to apply dictates on ALL people in a country is called "Totalitarianism."

The term "all" is an absolute. The people who support a proposal that dictates the health care of all Americans is an "Absolutist."

What is interesting about the non-debate leading up to the proposal is that there was very little discussion of the form of health care reform.

The agitation campaign for reform has little substance beyond an attack of employer based insurance for not including everyone.

The circuitous path to totalitarianism comes from the framing of the debate. A manipulation campaign from the Left has people faulting insurance companies for being too small.

I believe that, if we had a truly authentic discussion about what people want in health care, our debate would realize that the current implementation of insurance is too large and domineering and that people would be better off self-financing primary care, and using insurance proper for catastrophic care.

The disingenuous effort to manufacture discontent has a large number of people happy to embrace serfdom despite the fact that serfdom has never led to the prosperity and health that people desire.

Sunday, August 09, 2009

My Opposition to Responsible Health Reform

Turns out that I am opposed to Responsible Health Reform.


I was really hoping to be an advocate of such a worthy cause.

This site is from the US Chamber of Commerce. The CoC supports the views of its members ... which happens to be politically connected businesses.

The site has valid points, but I disagree with the bolded section of their broad message which they summarize on the campaign page:

"America needs a better health care system -- one that delivers accessible, affordable, high-quality care. But we can’t achieve these goals with policies that attack the bedrock of our current health care system – employer sponsored health insurance."

There is absolutely nothing wrong with criticizing (attacking) business models that one doesn't like. A truly free market thrives on criticism.

It is not uncommon for open criticism of a business to inspire entrepreneurs to build a better business models.

I think the Medical Savings And Loan is a better mechanism for funding health care.

I could be wrong. I often am.

The criticism of a business often results in internal improvements in that business.

Nations that disallow criticism rarely improve.

I believe the CoC has focused on the wrong issue. The criticism of employer based insurance is not at fault.

The problem is the way that the left is criticizing the status quo.

What is wrong is that progressives have framed the debate as a Hegelian style thesis/antithesis conflict with an absolutist end in sight.

The freedom of speech is fundamental to the American Way.

The criticism isn't the problem.

The totalitarian goal is what is wrong. The progressives aren't leading us on a path toward improvement. They are following a totalitarian vision that destroys the path toward improvement. My next post will be on the totalitarian vision.

Good Example of Projected Hatred

This person made me feel really sad. Some one is twittering with the name Ann7837. The account has the little peace symbol icon shown to the left.

Her bio is "doing my best to piss off the religious right"

A typical posts is "Birthers, Deathers, Lifers..who can keep track It's all about hate and fear anyway...must be depressing to be so hate filled & angry."

I suspect that most instance of projection are unintentional. We see the worst of ourselves in others; so we project.

This twitter account shows a studied use of projection as a propaganda tool.

There's thousands of examples of projection in the media: Steve Colbert, Frank Burns (played by Larry Linville), Soros' Billionaires for Bush, etc..

Apparently, Conservatives on Twitter have been trying to poke fun at the hatred projected on them by the Democratic leadership.

Humor can be a good strategy against projection. The left has never responded well to humor or criticism.

Nancy Pelosi provided a nice example of projection. She ridicules the "grassroots movement" against the Healthcare take over as "astroturfers." shows the astroturfers with handmade signs and clearly disorganized. He went to the pro-Pelosi camp and found people being given professional produced signs, bullhorns and being coached by political organizers.

Pelosi's astroturf arguments are sbsurd. The argument is essentially that the people being indoctrinated and organized by a community organizers are authentic in their actions, while those on the outside are all paid shills.

RT: RetiredFireCapt points out that the Dems were hiring people to support Obamacare off GraigsList. The Sacramento CL lists paying $250 to support the Health Care power grab.

The other truly bizarre thing about this event is that the Pelosi supporters are making concerted efforts to frame the astroturfers as people being paid by the insurance company. Politically connected insurance companies will make out like a bandit through the Obama bill. Were I a CEO, the last thing I would want to do is be seen associating with the "teabaggers." I would want my name on the donation list for Democratic candidates. When the new regulators in the massive Obama healthcare bureaucracy reward friends and punish enenies, it is better to be numbered among friends.

Hopefully we will some day figure out how to rise about the propaganda techniques that are being taught by the progressives that dominate education. Until then, we live in scary times where propaganda moves and counter moves could tear our nation apart.

Saturday, August 08, 2009

The Object Oriented Tax

It is possible that tax reform will be the next item on the change agenda. As I understand, there is a desire to move the nation from a income tax to a consumption based tax. The problem with consumption based taxes is that the consumption taxes eliminate the system of progressive tax rates.

I was just reading threads on a tax reform proposal called The FairTax which creates a national sales tax.

In preparation for the fray, I created a new section of to discuss my proposal for tax reform.

I call my proposal the Object Oriented Tax.

Needless to say, the tax takes a fresh look at the challenge of taxation and comes up with an extremely clever system that focuses on the needs of the individual.

The OOT creates an abstract object that sits between a person's income and their consumption.

People will have two types of accounts. They will have a pre-tax and post-tax account. Imagine that your savings account is a pre-tax and your checking account is post-tax account. People will have their paycheck deposited into their savings account. They will be taxed when they transfer money from savings into checking.

It is an individual-centric sales tax.

I have a large number of pots on the burner at the moment. I opened a Disqus thread and will will develop the different ideas in a circular fashion.

Look At the Form Before Talking Reform

Portability and pre-existing conditions are primary concerns in the health care debate. We can actually look at other areas in the economy and find the solution to this problem.

A pension is a retirement program in which one's employer invests funds on the behalf an of an employee then pays a fixed annuity on the employee's retirement. A 401K program is a program where a part of an employee's check goes into an account owned by the employee.

A 401K is inherently portabilty. It may be a hassle, but the money in the account is real and it belongs to the employee. Greedy banks with greedy employees want a shot at investing that money. There is no need for government coercion when grubby hands in the free market line up to provide investment services.

A pension is not portable because the benefit was derived from one's connection to the employer. Changing employment severs that connection.

A new employer cannot simply add the 15 years you had at your last company to your new pension. Changing jobs means you are a new hire.

Employer based medical insurance is like a traditional pension. It is not portable because it is based on the experience of the employer.

The HSA and Medical Savings and Loan are assets owned by the individual. Hence, they are inherently portable. When you change jobs, you will find a large number of grubby little hands competing for a chance to help you invest your savings.

Pre-existing clauses cannot stop a person from enrolling in an HSA. Lack of money might be a problem, but there is nothing to prevent anyone from saving.

The Medical Savings and Loan is concerned with the policy holder's ability to repay. A MS&L would be opened to accepting enrollees with current medical expenses provided the enrollee had a future income stream.

The form of health care coverage is clearly flammoxed. An authentic debate on changing the form would have included an examination of the faults of the current form of insurance.

The events around the Obamacare disaster seems indicate that the politicos at the center of power have done little thinking beyond using the current bad form of health care financing for and audacious power grab.

Friday, August 07, 2009

Big Insurers in Health Care

BusinessWeek has an article on the influence that big insurance (and big medicine for that matter) have had in shaping the health care reform package.

This piece of garbage masquerading as health care reform is not about providing better coverage for people. It is all about forcing people into financial programs that really are not in their best interest.

The idea that the people protesting the program are shills of the insurance industry is completely absurd. The people protesting this legislation are protesting a big government program that will increase costs and decrease quality.

Insurance companies will be the primary beneficiary of the increased costs.

Insurance works by calculating the expenses of a defined set of products for a defined group of people. The insurance company adds a generous profit to their calculation and sells the product the product to the market.

When the cost of goods goes up, insurance companies adjust premiums to match the new costs. In this adjustment, they add the same percent profit. A ten percent profit on $100M is $10. If the costs double, the insurance company simply doubles the premium and passes the cost to the customer. Here’s the deal. A 10% premium on $200M is $20M.

The insurance companies want the cost of the products they cover to go up. It increases their profit. The only thing insurance companies want to avoid are things that increase their costs relative to their competitors.

For this reason, insurance companies are routinely in favor of legislation and regulation that create a systemic increase in costs. Increased costs increase their profits.

The long history and corrupt history of government backed health care reform efforts have all had the effect of increasing base costs. Artificial increases in costs result in a very real increase in the profit and political power of the insurance industry.

I've written a number of articles explaining how the new legislation fundamentally changes your current coverage. These articles are about how the legislation affects you. They are not about how the legislation affects the insurance company.

When legislation makes a fundamental change to your coverage, it makes it so your coverage is something fundamentally different.

The effect the legislation will have on big insurance companies is that it will increase the base costs of health care and increase their profits.

Insurance companies rarely campaign against reform because they own the reform.

Small insurance companies that can't afford to pay protection money to the progressive thugs regulating the show will go out of business or merge with big firms. The big insurance companies will make out like bandits.

The bill fundamentally changes the nature of your insurance.

The three things the bill does are: It expands the pool of products covered by insurance, it forces insurance companies to take on people with pre-existing conditions, and it forces people to buy insurance even when the product they are forced to purchase is not in their best interest.

For example, a college student (struggling to pay for textbooks and food) will be forced to buy insurance in which their expected health care costs are only a tenth of the price they pay for the insurance.

I've joined the protestors on this bill with the hope that those protesting the current power grab will wake up and realize that the insurance industry is the problem and the solution is to self-finance care through an HSA or Medical Savings and Loan.

The health care debate shows that depency on insurance companies fool hardy and that the way to protect you and your family is to yank money from the insurance companies and self finance care. Were people to self finance in droves, the cost of care would plummet. The quality would sky rocket and we would achieve the goal of affordable care that we all (except the big insurance companies and political operatives) desire.

A Comment on a Comment

I wanted to point out a really bizarre comment left by yomamma.

This comment accuses me of quoting out of context in the first paragraph. In the second paragraph, yomomma starts stuffing words in my mouth claiming that my post said things that it did not.

This is a classic case of projection. The commenter starts with an accusation that I am feeding words into the mouth of others and immediately starts feeding words into my mouth.

Thursday, August 06, 2009

Redefining Your Insurance

Back to reading the bill …

A central issue in the Health Care Reform Debate is the claim that people will be allowed to keep their current insurance.

Insurance is an interesting product. The product starts by examining a package of goods purchased by a given set of people through a given set of providers. The insurance company uses mathematical modeling techniques to extrapolate future consumption of the goods by the group. The insurance company then offers to cover the package of goods for the group for a set premium based on their analysis.

Looking at the health care bill, we find that it gives the government control in defining the group. As noted previously, it prevents your insurance company from taking on new customers. It also forbids the company from denying coverage to people with pre-existing conditions.

Section 111: A qualified health benefits plan may not impose any pre-existing condition exclusion

The bill gives the public option the ability cherry pick clients. Health and Human Services can thrust people with expensive pre-existing conditions onto those insurance companies with which they are engaged in business war while preventing the company the ability to grow and cover the costs.

The program gives the HHS the power to define the products covered. They define the minimum benefits of plans. It may include things that your current program does not. For example Section 114 requires plans to provide mental health and substance abuse disorder benefits. People who prefer to get such counseling through a church group must pay for those who want the service through secular programs.

Ha, ha. You have to pay twice.

Section 115 (ENSURING ADEQUACY OF PROVIDER NETWORKS) gives the HHS the power to scrutinize and define the provider network for your plan.

If this isn't pathetic enough, the bill gives HHS the power to redefine the formulas of the insurance company to define their formula.

Section 116(b). In implementing subsection (a), the Commissioner shall build on the definition and methodology developed by the Secretary of Health and Human Services under the amendments made by section 161 for determining how to calculate the medical loss ratio.

Your current insurance is really nothing more than an analysis of a package of goods offered by a given network of providers for a given group of people.

The health care reform gives the HHS the power to redefine the package of goods, the method of analysis, the network of providers and the group of people.

The bill gives the government absolute power in fundamentally altering every aspect of your current insurance.

The statement that people can keep their current insurance when government insiders capture the ability to redefine all elements of the insurance is one of the most audacious and cynical political sound bytes ever put before the public.

You don't get to keep your insurance when your government has totalitarian power to redefine it at the root level.