The Right Incentives for Health Care

In The New York Times editorial today, “Obama’s Other Surprise,” Thomas Friedman says:

Obamacare is based on the notion that a main reason we pay so much more than any other industrial nation for health care, without better results, is because the incentive structure in our system is wrong. Doctors and hospitals are paid primarily for procedures and tests, not health outcomes. The goal of the health care law is to flip this fee-for-services system (which some insurance companies are emulating) to one where the government pays doctors and hospitals to keep Medicare patients healthy and the services they do render are reimbursed more for their value than volume.

Friedman continues by saying that entrepreneurs are developing applications that sift through mounds of data to find the best health outcomes. Thomas Friedman is half right. While I am not sure what notion Obamacare is based on, other than what might have been politically possible, it is true that our incentive structure is wrong. We do need to stop paying for fee-for-services, and that is part of the problem. The other problem is the for-profit insurance industry, which has high administrative costs and attempts to avoid paying for clients’ medical care. The solution is a single-payer system that establishes global budgets for health care providers. This would still leave the market open for entrepreneurs because medical providers would want the most effective care to lower costs.

Our national health care cost as a percentage of GDP is currently at least 50 percent greater than any other nation. To reduce these costs, we need to eliminate all unnecessary expenses, whether they are unnecessary medical procedures or unnecessary administrative expenses caused by insurance companies that increase costs without adding value. Currently, 84 million people will be without health insurance at some point this year.

A single-payer system would cover everybody and reduce costs providing the best and only viable solution to our current and future health care dilemmas.

Bridge Collapse

Another bridge has collapsed.  The I-5 Skagit River Bridge in Washington fell about 7 p.m. on Thursday. Like a plunging bridge, the infrastructure of the United States plunges ever closer to being like a third-world country.

The America Society of Civil Engineers’ (ASCE) most recent infrastructure Report Card gave bridges a grade of C-plus. This is better than the overall grade of D-plus, but still nothing to be proud of. If a bridge were in a family, I can just picture it saying to mom and dad, “Gee mom and dad, I did better than average.”

Washington state’s overall infrastructure grade was C with the bridges earning a C-minus. “Gee mom and dad, a C-minus is passing.”

Our infrastructure ranking has declined from 6th in the world in 2007 to 16th in 2012, and to 25th place in 2013. This dismal decline illustrates the failure of all levels of government to tax so infrastructure projects could be funded properly. The ASCE estimates that we need about $514 billion per year for 7 years to bring our infrastructure grade to a B.

We could finance infrastructure projects and jumpstart the economy by taxing the $1.7 trillion in earnings that U.S. multinational corporations have hoarded overseas. At the current tax rate, this would bring in about $595 of spending money. The excess could be used for food aid, medical care, or education.

And, perhaps one day, the bridge can say to mom and dad, “I got an A, aren’t you proud?” I know I would be.


Misinformation, Climate Change, Objective Reporting

Misinformation can be hard to fight, and unfortunately, it consistently gets spread on a variety of topics. For reporters, one of the toughest topics can be how to challenge misinformation. A good reporter strives to be objective and fair. This generally means that all sides deserve a chance to present their view. However, sometimes this portrayal means that all sides are given the same validity, which presents a false view of the facts.

The climate change debate epitomizes this issue. Often, one person is allowed to argue that climate change is real and man-made, while the other person argues that climate change is not happening or is due to natural causes beyond the control of humans. This implies that about half of the experts believe that climate change is real while the other half has doubts about it.

The facts tell a different story. A recently released study found that 97 percent of the papers and, more importantly, that the same percentage of climate scientists agree that human activity causes climate change. For many years the overwhelming scientific consensus has been that climate change is man-made.

If journalists are going to publish, as legendary reporter Carl Bernstein said, “the best obtainable version of the truth,” then a new standard is needed for presenting the validity of controversial topics. Journalists must present the news in a way that reveals the expert consensus so that people understand how much disagreement or agreement there actually is. For climate change, this would require stating that there is essentially no controversy about the issue. While balance may require presenting all sides, objectivity requires that the validity of arguments also be presented. Balance without objectivity in neither balanced nor fair.

The other action journalists must take is to disclose and challenge when officials make statements that are not true. If officials know that they are going to be challenged, then perhaps they would be more careful in what they say.

Two of the most egregious misinformation examples are that the passage of health care reform would result in  “death panels,” and the claim that Saddam Hussein was linked to 9/11. The latter misinformation was so effectively spread that at one time more than two-thirds of the U.S. population believed Hussein was involved in the 9/11 attacks. This misconception contributed to the United States entry into the Iraq War in March 2003.

The consequences of misinformation can be deadly, which is why journalists must always strive to accurately portray “the best obtainable version of the truth.” If the portrayal requires tougher questioning and challenging officials, then we need to start immediately.

No tax money for private stadiums

Here is another case of public money going to a private organization. Chicago is proposing giving $125 million to help DePaul University build a new stadium. This is no better than giving taxes to professional sports team or giving taxes to businesses without knowing what public interest is served—which happens way too often.

Most studies indicate that using public funds to build sports arenas makes for bad investments. Another problem with using public funding for private entities is that it gives the entity an unfair advantage over other businesses. The biggest problem is that it misplaces priorities.

If Chicago has an extra $125 million, then there are much better uses for the money. Funds could be applied to scholarships or basic research if the money is going to be used at institutions of higher learning. Other appropriate uses would be for health care, reducing poverty, or reducing Chicago’s high murder rate.

Stadiums, however, should not even be in the discussion.


Punish the poor; why not just criminalize them

Benefits will drop an average of $1.40 per person per meal once the temporary boost to the Supplemental Nutrition Assistance Program (SNAP) expires on November 1. The 2009 Recovery Act gave an interim benefit increase to SNAP (formerly known as food stamps). The Senate Agriculture Committee approved a bill on Tuesday that would cut food stamps by $4 billion while it expands federally subsidized crop insurance.

The Senate bill’s cut in food assistance and increase in crop subsidies is wrongheaded, but is paltry compared to the bill proposed in the House. Last Friday, Rep. Frank Lucas, Chairman of the House Agriculture Committee, and the Committee’s ranking member, Rep. Collin Peterson, proposed a farm bill that would cut SNAPby almost $21 billion over the next decade, eliminating food assistance to nearly 2 million low-income people, mostly working families with children and senior citizens.  The proposal reduces total farm bill spending by an estimated $39.7 billion over ten years, so more than half of its cuts come from SNAP,” according to the Center on Budget and Policy Priorities.

I am surprised and repulsed by the Senate’s bill and just repulsed by the House’s bill. Anything the House does to harm the poor does not surprise me anymore.

If Congress really wants to punish the poor, then they should make being poor a crime. Prison time could be added so the poor are thrown in jail. After all, we already allow creditors to take money even if it takes food from the mouth of children and adults, so prison could be viewed a viable option. The one downside to my plan is that once the poor are in prison we would have to feed them, and we wouldn’t want that, would we?

My only concern is that someone might actually think that criminalizing the poor is a good idea.

Actions 2013

Here is a list of actions that would solve the health care crisis in the United States, improve the economy, and create better government in 2013.

1.    Enact single-payer health care system.
2.    Properly fund programs for SNAP (food stamps), housing, etc. for people in need. Increase spending for food programs and housing programs so everybody has enough to eat and adequate housing. Extend unemployment insurance for those in need.
3.    Commit to education fully. Let’s establish that class sizes should have no more than 20 students though high school and work to increase the number of teachers to increase this goal. Provide public funding for students through at least the undergraduate level of college.
4.    Address income inequality by requiring that top executives pay increases or bonuses must be less than or equal to the increases or bonuses paid to employees.
5.    Make gun safety laws stricter by enacting the following requirements:

  • Require background checks for anybody buying a gun.
  • Require training in gun safety.
  • Make straw man purchasing of guns illegal.
  • Require valid gun registration to buy ammunition.
  • Allow researchers and law enforcement officials to use the gun registration database
    to track guns in crime.

6.    Enact a stimulus bill. Debt is not the main concern now, jobs are. We can start by rebuilding infrastructure and allowing the debt ceiling to increase automatically.
7.    Get rid of corporate welfare and prohibit special tax breaks (incentives) for individual companies.
8.    Make the following changes to the tax code:

  • Enact a financial transaction tax.
  • Change tax laws so that only amount of income determines tax rates, not source of income.
  • Change tax laws to remove loopholes so profitable companies must pay taxes and remove tax breaks on foreign profits.
  • Change tax law to remove separate taxes on wages. Have only one federal income tax and allocate percentages to pay for Social Security and Medicare.

9.    Require complete disclosure of all financial donations to politicians and political campaigns.
10.    Require that all lobbyist meetings be documented with a summary of issues and what the lobbyist requested. (These should be posted every week on the Internet.)
11.    Only allow citizens who are eligible to vote in an election or who can register to vote in an election to contribute to campaigns. This would require overturning Citizen’s United v. Federal Election Commission either by the Supreme Court or with a constitutional amendment.
12.    Research and support clean, renewable energy.

Too often it is unclear what actions need to be take to improve the U.S. These actions provide a starting point for reforms that would significantly improve the quality of life in the U.S. and provide a government that is more accountable.

(Note that I will be addressing these topics in future postings.)

The true war on religion

(This is a reprint of an editorial I wrote for the Missourian. The original editorial can be found here. The full text of the article is below.)

The war on religion manifests itself in many forms. When pharmacists refuse to sell birth control, they are imposing their religious beliefs on others. When I walk into a store, I should be able to buy anything that the store sells. To illustrate, suppose I decide that I want to buy some beer in a grocery store. When I am checking out, the clerk refuses to sell me the beer because drinking alcohol is against his religion. Both should spark outrage at the seller.

And this shows the true war on religion in the United States — the attempt by some to impose their religious beliefs on everybody else.

This issue often manifests itself in the politics of reproduction. Whenever someone tries to limit access to abortion or impose medically unnecessary rules to restrict abortion, they are attempting to impose their religious beliefs on others. When somebody tries to restrict access to birth control, they are also imposing their religious beliefs on others.

When there is a moral issue, who gets to decide? Some people and religions believe abortion is murder because life begins at conception. Other people and religions believe life begins at birth. Should one group have the right to impose their will on others by outlawing abortions? Or turn the question around: Should one group have the right to force women to have abortions in certain circumstances? In either case, if you allow one, then the other is possible with a change in policy. Abortion could be banned or forced, depending on the group in charge.

The individual’s right to make the decision is asserted when the state is not allowed to prevent or force abortions.

Should there be restrictions on a person’s ability to purchase or use contraception? The 99 percent of women who use birth control at some point in their lives might say no.

When the Republican presidential candidates are pontificating about the war on religion, they are right that there is a war. They are wrong about who is waging it. The candidates are actually waging the war because they are attempting to impose their religious beliefs on others. Preventing unplanned pregnancies is good public policy and will help reduce abortions. It is ironic that these same candidates who are against abortion are supporting a policy that will likely cause abortions to increase.

Preventing gay marriage is another example of some trying to impose their religious belief on others. Marriage by the state is a civil contract that provides for certain benefits and responsibilities between two people. If two men or two women want to enter this contract, they should have that right, just as they would for any other contract. At the same time, if any clergy do not want to perform gay marriages for religious reasons, that should be their right. Religious freedom is preserved, and none are forced to violate their beliefs.

If some are allowed to impose their views on others, where does it end? The choices must be left to the individual, not the state. Otherwise, we will have some imposing their religious beliefs on others. That war must be avoided.

How to help the poor and everybody else

In my previous posting, “What Poverty Program,” I explained why the Republican presidential candidates policies would hurt the poor, which of course leaves the obvious question, what policies would help the poor.

For someone who is poor, the first priority is to ensure that food, clothing and shelter needs are met. In the U.S., there are 33 million adults and 17 million children who suffer from hunger. Homelessness affects 656,000 people on any given day.

The next basic need is health care. Health care costs are a tremendous burden on both the poor and middle-class. Medical expenses cause more than 60 percent of the bankruptcies in the United States.

Currently, there are about 50 million people without health insurance causing about 50,000 unnecessary deaths in this country. According to the Congressional Budget Office, even at its best, the Affordable Care Act will leave about 23 million uninsured causing about 23,000 unnecessary deaths.

The U.S. has the most expensive health care costs of any nation. Our costs are 45 percent higher as a function of GDP than any other nation, and our per capita expenses are almost 50 percent greater.

A single-payer health care system will resolve these problems and reduce costs. Every other industrialized nation that has a single-payer system covers everybody for less money. Bankruptcies due to health care costs are not a problem in these countries.

Education could use some changes. A good start would be to increase funding to levels before the recession so laid-off teachers could be hired back. Next commit to keeping classes sizes small, around 15 to 20 students.

More importantly, we could give the students the same benefits as prisoners, or as one superintendent in Michigan said:

Please give my students three meals a day. Please give my children access to free health care. Please provide my school district Internet access and computers. Please put books in my library. Please give my students a weight room so we can be big and strong. We provide all of these things to prisoners because they have constitutional rights. What about the rights of youth, our future?

The nation should also commit to providing free college education for any student accepted into an institution of higher learning. This would prevent students being saddled with a large debt when they graduate. This would free up money for more productive endeavors, such as purchasing products, investments, or entrepreneurship, rather than paying off student loans.

The school buildings themselves could use improvement. These buildings and the rest of our infrastructure need rebuilding. The American Society of Civil Engineers says our infrastructure is close to a failing state, and requires $2.2 trillion over five years to renovate. Rebuilding our infrastructure would create jobs, and could provide the impetus to invigorate the economy.

The above proposals would help the poor and everybody else. CNN’s Global Public Square host Fareed Zakaria summed it up this way when he said:

In other words, the big shift in the United States over the past two decades has not been a rise in regulations and taxation but rather a decline in investment, in physical and human capital. … [And] investment is the crucial locomotive of long-term growth.

That surge in investment [after World War II] by people and government produced a generation of growth after the war. If we want the next generation of growth, we need a similarly serious strategy of investment.

It is time to get serious about investing in our human capital and infrastructure to ensure the long-term economic growth of our country. Everybody would benefit from these investments.

What Poverty Program

All the Republican presidential candidates advocate the same trickle-down policies that produced only 1.08 million jobs during George W. Bush’s presidency. They advocate lower taxes mainly for the wealthy, unregulated markets and less spending. Such policies have not and would not help the poor or the country.

Presidential candidate Mitt Romney has been receiving much criticism for his statement, “I’m not concerned about the very poor.” Romney went on to say, “We have a safety net there. If it needs repair, I’ll fix it. I’m not concerned about the very rich. They’re doing just fine. I’m concerned about the very heart of the America, the 90 percent, 95 percent of Americans who right now are struggling.”

One day later, Romney backtracked by saying, “It was a misstatement. I misspoke.” I agree he misspoke when he said that he cares about poor people. The Republican presidential candidates policies demonstrate they have no concern for the poor.

Romney himself has proposed spending cuts that would greatly reduce the safety net for the poor. He meant to say, if it ain’t broke, break it.

Like his other policies, Romney’s tax plan hurts the poor. An analysis by the Tax Policy Center showed that poor families would pay slightly more, around $140, while millionaires would gain more than $145,000 in reduced taxes.

Rick Santorum advocates policies that would “reform welfare to the point that it would offer no welfare at all.” Santorum’s would cut taxes for most Americans, but like Romney’s tax plan, most of the benefits go to the wealthy.

When Newt Gingrich is busy excoriating Romney for his lack of concern, he neglects to mention his own callousness.  Gingrich has said that, “Really poor children … have no habits of working and have nobody around them who works.” He also says that child labor laws are “truly stupid” and poor children should work as janitors in the schools they attend.

Gingrich’s tax plan is even worse that Romney’s in some ways. The rich would gain more than $600,000. Since, Gingrich does not tax capital gains, dividends, or interest income, somebody like Romney could end up paying no income taxes

In addition, the Republican candidates have railed against the Affordable Care Act, or “Obamacare.” The ACA, despite it faults, does make health more affordable and available, which of course, helps poor people. (A single-payer system would save more lives, cost less, and make health care affordable for all, but that is another blog entry or editorial.)

Rick Tyler, with the pro Gingrich super PAC, Winning Our Future, illustrated the candidates’ indifference to the poor during an interview on MSNBC. Lawrence O’Donnell asked Tyler, “You say that Republican anti-poverty programs have worked. Please name me the Republican anti-poverty policy that has lifted people out of poverty and tell me how many people were lifted out of poverty by Republican policy?”

Eventually, Tyler’s responded by saying, “Lower taxes, more freedom, less government, and free enterprise. That’s the program.” He was unable to name even one specific program deliberately designed by Republicans to help the poor.

During a slow economy, austerity combined with tax cuts for the wealthy is the wrong approach. We need programs that help the poor instead of programs that hurt the poor and benefit the rich.