Archive for category Health Care

Alfonse and Gaston

With the ruling by the Senate Parliamentarian that having a law means, you know, actually having a law in force, the self-Slaughter Strategy seems dead, further complicating matters for Democrats who are trying to find the procedural loopholes necessary to pass health care.  In effect, the Slaughter Strategy – a frankly bizarre attempt to redefine “passed” – was a way for the House to get the Senate to go first, even though right now, it’s the House’s turn.  The House clearly doesn’t trust that Senate will make changes, especially since, as far as the White House is concerned, it doesn’t really matter.  Remember, the Republicans are the opposition, but the Senate is the enemy.

Now, the House will actually be on the record on substantive, not procedural votes, and it will have to find a way to pass either the Senate bill or something acceptable to the Senate before reconciliation can move forward.

The Democrats will try to paint this as “raising the bar,” but of course, reconciliation simply cannot act on something that isn’t in force.  Voting that something is conditionally in force, never presenting a finished law to the President for his signature, doesn’t actually pass a bill out of Congress, so this ruling should be taken as common sense and perfectly reasonable.  That common sense and reason have departed from the Democratic camp by now should be evident to all.

One thing we should have learned by now is not to declare this thing dead until the new Congress is sworn in next January.  But if the House is resorting to parliamentary contortions like the Slaughter Strategy, it’s clear they don’t think they have the votes at this point.

And the Senate majority leader is “sending a letter to Minority Leader Mitch McConnell (R-Ky.) in which he dared the GOP to vote against reform,” which reminds me of nothing so much as this:

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Movies & Parliaments & CFCs, Oh My!

Boy, you don’t see that very often.  TCM is usually the paragon of accuracy, but they just credited some actress named, “Celeste Holmes,” when they meant Celeste Holm.  Yes, she’s been married 5 times, but not to anyone named Holmes.  I’ve never seen them do anything like that before, especially with an actress who’s not only still alive, but still working.

It also turns out that, contrary to popular mythology, beagles do not like blueberries.  At least one beagle doesn’t.

I’m the last person on this and several other planets to realize this, but the Internet is, quite simply, the most amazing tool ever devised by the mind of man.  Thirty-fice years ago, my father took me to a movie, a cartoon.  I remember exactly one thing about it: something standing on a keyboard, saying that it was going to commit suicide and “go to that big typewriter in the sky.”  Now 35 years ago, when you got to the theater at 12:30 for an 11:45 showing, you walked in, sat through the last half, and then sat through the first half, eventually uttering the words, “this is where we came in,” and left.  That scene, the one with the suicidal something standing on a typewriter, was where we came in.  So it’s also where we left.  So it’s also the only thing I remembered.

I won’t say it kept me up nights.  Lots of other worries to do that.  And B.I. that would have been the end of it.  But I would google the phrase every once in a while, and maybe some keywords like, “typewriter movie cartoon.”  Nothing.  Until finally, something.  Which something is available streaming on Netflix.  So I watched until I got to the scene I remembered, shouted “Aha!” in joyous triumph.  And then I said, “this is where I came in,” and left.

There’s been a lot of discussion about the un-repealable sections of the Senate’s Health Care Assimilation.  Let’s be clear – there is no such thing as an un-repealable law.  Parliaments can’t bind future parliaments, and Congresses can’t bind future Congresses.  The Democrats are claiming that this is merely a routine alteration in Senate procedure, as opposed to Seante rules, but in either case, the courts are unlikely to intervene.

But there it is in black and white: any attempt to repeal the rationing panels will “not be in order.”

Not so fast there, Slots.  When the Republicans have retaken both houses, presumably the Senate and House parliamentarians will rule that their repeal measures are out of order.  The chair will so rule.  Or the chair will rule the other way.  One side will move to over-rule the chair.  At that point, all hell will break loose, but a vote will be taken.  If the Republicans try to overrule the chair, then the Dems will try to grind process to a halt to avoid a vote.  If the Dems are ruled against, the chair had better be damn sure he has the votes before making the ruling.

As of 2005, the chair can be overruled by a majority vote:

Appealing Rulings of the Chair. By House tradition, the presiding officer’s rulings on points of order raised by Members are seldom appealed. As a result, the House has a relatively large and consistent body of precedents based on rulings of the chair. If the chair’s ruling is appealed, the full House decides by majority vote whether to sustain or overrule this ruling. Because this vote is viewed as a serious test of the chair’s authority, it is typically settled along party lines, with the majority sustaining the chair. In contrast to the Senate, there are only a few situations when the House’s presiding officer does not rule on points of order.

In the Senate, the presiding officer’s rulings on points of order raised by Senators are frequently appealed. The full Senate votes on whether to sustain or overrule the ruling. Under Rule XX, the presiding officer has the option of submitting any question of order to the full Senate for a majority vote decision. He is required to submit questions of order that raise constitutional issues, and those concerning the germaneness or relevancy of amendments to appropriations bills, to the full Senate. Senate votes on appealed rulings of the chair, and on points of order submitted to the full body, often turn on the political concerns of the moment rather than on established Senate practices and procedures. As a result, the Senate has a smaller and less consistent body of precedents than does the House. Yet, because the Senate usually operates informally, it is a more precedent- than rule-regulated institution.

There’s a scene in Barbara Tuchman’s, The Proud Tower, where the Speaker of the House forces a debate on the so-called, “silent quorum,” where the minority could prevent a quorum by just refusing to answer the roll.  It’s transcendent political theater, with a Texas congressman whetting his knife on his boots, other representatives storming the podium, congressmen vocally denying their presence.  In the end, Speaker Thomas Reed (R-Maine) had his way.  If this bill passes with such a provision, I for one would feel cheated if I didn’t get to see a similar scene play out on C-SPAN.

This is why it is critical that Republicans not just wash back into office on a wave of popular anger of what the bums have done.  They have to win with a mandate to roll this thing back.   They have to go in having made it politically palatable to vote that way, and they have to tie Obama personally to this legislation, and keep tying him to it.  The large jump in Rasmussen’s “strongly disapprove” rating for Obama was almost certainly a result of the first cloture vote.  The Dems aren’t operating inside a Beltway Bubble, but in an underground steel-reinforced titanium Beltway Bunker.  But if the Republicans don’t promise to undo the damage, it may well end the party within a few election cycles.

Now it’s the CFCs.  Funny, but about 20 years ago, a friend of mine named Ron Bailey wrote a book called, Ecoscam.  The one credible threat that the enviros were tossing around was CFCs and the ozone hole.  We did ban CFCs, and while it’s take a while for the last of them to waft their way up to the upper atmosphere, there to interact with radiation and destroy ozone, by 2000, CFC levels had begun to decline.  Along with the earth’s temperature.

I don’t know if Prof. Lu is correct.  But I do know that the jokers over at CRU were making it up, and that NASA was covering for them.  I’m not willing to pay Physics Reports $31 to see a paper I’m not qualified to review.  But it’ll be interesting to see what the scientific reaction is.  So far, it’s all been blogs and newspapers.  Eventually, we’ll see whether or not the establishment has learned the right lessons from Climategate, or whether they try to pretend that this paper, along with their own malfeasance, never happened.

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Good Luck…

finding that flu vaccine.  Good thing you won’t have to wait for that hip surgery.

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Colorado Insurers Weight In – Finally

Possibly too late, Colorado insurers are finally pointing out some of the economic fallacies inherent in the propose federal takeover of health care.  Unfortunately, the insurers don’t go far enough in their condemnation.  Fortunately, their opponents are simply reflexively trying to demonize them, and in the process, saying some really stupid things.

First, the insurers:

At issue are what insurance companies consider absurdly low penalties for people who choose not to buy health insurance.

Their concern: People will buy insurance only when they desperately need it, such as after they’re diagnosed with cancer or heart disease.

Healthy people might choose to pay the penalty, now proposed at a few hundred dollars per year, because it is far less expensive than buying insurance.

This is is true as far as it goes, but it’s not clear that even universal coverage would alleviate this problem.  Still, the insurance companies have put their finger on a problem: if you’re not actually required to buy insurance until you’re sick, then that’s when you will buy insurance.

Naturally, this has led to howls on indignation from those defending the President’s and Congress’s proposals:

“They are assuming that people would game the system,” said Denise de Percin, executive director of the Colorado Consumer Health Initiative.

“They are looking at the worst-case scenario. People aren’t stupid — they are not going to pay a penalty and get nothing,” de Percin said. (emphasis added -ed.)

Guaranteed issue is, in and of itself, only part of the problem.  Colorado has, in effect, a government guaranteed issue for a high-risk pool.  The reason that this is unacceptable to those pushing reform is that by lumping the high-risk (or, already-established-risk) patients together, it creates a pool whose premiums are higher. They therefore argue for the concurrent requirement of “community rating.” which in effect pools the entire community – usually the state – together into one large pool where everyone gets charged the same amount.  The various Democratic bills all contain some sort of community rating proposal as well.

In fact, we’ve already run this experiment in several states.  The result is universally higher premiums, and it’s not hard to see why.  Because now, as a healthy, premium-paying insured, I also need to cover the actual costs of people who waited until the diagnosis to get insurance, and the estimated costs of new people likely to enter the system who haven’t been diagnosed yet.

De Percin is right; people aren’t stupid, which is why they’d rather pay a penalty than pay for insurance they don’t need.  They could take the difference and save it, invest it, or buy catastrophic insurance, which doesn’t qualify as “insurance” under the plan, even though it comes much closer to the ideal of insurance.  The penalty is just the cost of participating in the system in the way they think is most to their benefit.  The insurance companies’ argument, that the penalty for not playing has to be bigger than the overall cost of playing – is perfectly sound.

There are two fundamental flaws with how we think of insurance, and the way  they interact is complicated by the fact that they’re mutually incompatible: 1) we think we’re spending other people’s money, and 2) we think of insurance as pre-paid medical expenses.  One of these is a shell game, and the other is counter to the notion of insurance.  The “guaranteed-issue/community-rating” combination just plays to the worst of both assumptions.

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Venture Capital, Take Note

In the generally miserable venture capital environment of that last few quarters, one bright spot has been the health sciences market.  It’s one of the area where Colorado can compete effectively, and an area where America is well ahead of the rest of the world.  It produces actual long-term savings and real quality-of-life and lifespan improvements.

And the Senate – presumably with the agreement of Colorado’s Bennet and Udall – is getting ready to kill it.

First, the numbers.  VC itself has, not surprisingly, gone cliff-diving along with the rest of investment capital recently.  After the dot-com craziness, total VC investment seemed to return to a normal growth curve this century before crashing in the recent downturn:

The one exception to this has been Life Sciences.  While well behind last year’s pace, VC in life sciences has recovered fairly well in Q2, to the average over the last 5 years, and close to 2005 levels:

Note the steep drop-off in Healthcare Services VC after 2000.  I’m not certain why that’s so, but it’d be interesting to find out.  Also note that medical device investment has grown not only in dollars, but also as a percentage of total LS investment.

While the National Venture Capital Association doesn’t provide crosstabs between regions and sectors, it’s reasonable to assume that at least some of Colorado’s growth from 3.0% of venture capital dollars in 2008 to 4.3% in 2009 is a result of our strong biotech sector.

Now, the Senate is proposing what is, in effect, a national excise tax on medical device sales, to help pay for the health care takeover.  (Hat tip: TigerHawk)  Exactly where do they think the large companies come from?  Exactly where do they think the large companies get their devices to re-sell?  They don’t free-ride on this technology, they buy it once the ideas have been developed by smaller, ie, venture firms.

Brilliant idea, gentlemen.

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So Much For That Whole Listening Thing

Back when the Town Hells started, I predicted that the President would give a health care speech in an effort to salvage an overhaul this year.  I thought that he would try to sell the same unpopular bill of goods, repackaged as a result of his having, “listened” to the anger and discontent that’s obviously out there.

I didn’t give him enough credit.  Instead, the President tried to repackage the same discredited speech.

Remarkably, the President managed to be defensive, dismissive, and deceptive all at the same time.  Which leads me to think that this speech was aimed not at the American public, but at Congressional Democrats.

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A Feature, Not a Bug

The Denver Post this morning reports on Sen. Bennet’s town hall in Pueblo, and on a Denver Chamber of Commerce poll (PDF) on Coloradoans and health care, excuse me, health insurance.   Sen. Bennet seems to have remained an inscrutable non-entity when it comes to actual policy issues, but the DCC report provides at least a little insight, both into how Coloradoans feel about their coverage and reform efforts, and how the Denver Chamber thinks

While ignoring the 77% of respondents who believe they have “good or excellent” care, Lynn Bartels focuses on the 26% who have “skipped a recommended medical test, prescription, treatment in the past 12 months for you or a family member due to cost.”  But neither the Post‘s crack reporters nor the Chamber’s summary addresses either double-counting (a “yes” counts for either the husband or the wife), or the seriousness of the treatment foregone.  Consider four families of four, 16 people in all, and one person questioned in each.  If only one person out of the 16 has foregone care, the result of this question will show a 25% positive, even though only 6% of the people covered by the question actually did without.

Sen. Bennet did, apparently, show some Doomsday slides about the wreck our economy and personal finances become if costs continue to rise at current rates.  Naturally, the idea that individuals, deciding not to pay for certain procedures, or to negotiate down the prices, might actually help bring about cost control, has never entered his mind.  To that extent, the decision of some people to do without rather than pay the insurance- and government-subsidized prices, which are largely fictional in any case, is a feature of what reform should look like, not a bug.

The other striking point is that while the Chamber opposes mandates for its members, it’s ok requiring an individual mandate.  The larger business members that compose the Chamber have always been good at externalizing costs.

One question: when will the Post get around to linking to original source material when it’s available online?  They almost never do this, for some reason.

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Health Care Microeconomics

When Susie was living in Oceanside, the local hospital was located at – I’m not making this up – One Healthy Way.   Evidently the Democrats had already implemented their health care plans.

Of course, there are many healthy ways, but the only way to get all of them going at once is to put decision-making power in the hands of actual consumers.  In the latest Atlantic, David Goldhill takes a close look at the perverse economic incentives currently embedded in our health care system, incentives that create all sorts of inefficiencies.  In this case, “inefficiencies” can mean longer waits for worse care at higher prices.  Virtually all of these distortions originate from a house of cards of government policies, each policy intended to fix the problems that the previous ones created, all the while making things steadily less stable.

It’s a brilliant piece, really, applying basic supply-and-demand economics and marketplace dynamics to the pieces of this system, and showing how they explain what’s wrong, and why our health care and insurance are costing us so much.

As with housing, directing so much of society’s resources to health care is stimulating the provision of vastly more care. Along the way, it’s also distorting demand, raising prices, and making us all poorer by crowding out other, possibly more beneficial, uses for the resources now air-dropped onto the island of health care.

Starting with insurance,virtually everything we do in health policy prevents prices from finding their own levels, providers and consumers from adjusting to dynamic market forces, confuses prices with costs, discourages cost competition, and then punishes people for responding to the incentives that policy creates.  Fundamentally, the problem is an unwillingness to confront actual costs and to pay for what we use.  We expect insurance to cover routine expenses, which ought not be insurable events.  Medicare gets away paying less than cost for services that are only available because someone else picks up the difference.  We’re recklessly borrowing from our future.   The patient is rarely the customer, and when he tries to be cost-conscious, hospitals won’t let him.

Every distortion we complain about has some weird incentive behind it.  Insurance costs so much because we expect it to pay for too much.  We have to restrain hospitals from buying new equipment because we subsidize it.  We prevent specialty facilities from competing with hospitals because we overpay for some services and underpay for others.  And the hospitals’ objections to competition mirror those of the railroads 100 years ago.  Britain right now is suffering through the Conrail of public health.  He doesn’t specifically address the growing wait-times for specialists, but there’s probably a perfectly good awful policy behind that, too.

Goldhill also comes up with reasonable estimates of how much the current bogeymen actually cost us.  You could take the entire insurance industry profit for 2009 and pay for America’s medical care for 4 days.  Think about that.  The “excess profit” that insurance-company-haters rail about amounts to 1% of our health spending.  IT efficiencies would probably improve service, but would also return about 3% of actual costs.

Goldhill proposes shifting the decision-making and purchasing back to the actual patient.  You pay for routine expenses out of income.  You pay for big expenses out of savings and credit.  And a single, government-run policy would backstop against catastrophe.

It shouldn’t be a surprise that, in an article full of what should be commonplace economic observations, the one false note is political.  A government-run catastrophic health plan would be under constant political pressure to carve out exceptions to favored groups and to lower the ceiling for everyone.   Competing catastrophic plans would be able to experiment with coverage amounts and price points.

Still, this is the kind of rigorous application of basic economics that’s been missing from the debate, and especially missing from any Democrat proposals on the table right now.

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Predictable Response

I’m getting ready to hit the road here in Hazleton, Penn.  This morning’s news is full of angry reactions over the health care bill at Senators’ and Representatives’ townhall meetings.

Come late August, maybe a week before Congress reconvenes, expect a speech from Obama explaining how, “we heard from you.  Boy, did we hear from you.  And we listened.”  Obama will then go on to explain how the bill’s revisions that he is proposing will meet these complaints.  It’s unlikely that the bill will actually contain much retreat from the President’s goals of socializing the system.  In fact, he may use the break as an opportunity to re-insert some of the bolder proposals in the initial bill, and sell them as meeting people’s demands.

Why so late?  Well, it will give resentment a chance to build.  Scared Democrats may be looking for a political victory (i.e., as bill passed) and at the same time be looking to make use of Obama’s personal (although not policy) popularity.  And of course, the less time people have to actually look at the thing, the more likely Congress will be to pass it.

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