This explains it all! Really! It does!

As e connected as I am I still enjoy sitting down in the morning and reading the Indy Star in its print form.  I have to admit I sometimes spend more time reading the funnies than anything else, but I do scan the first section (and the first and last page of Metro) But I do often read articles and this OpAn (opinion/analytical) piece from the Washington Post caught my attention.  I think Ezra Klein’s caught on to the problem,

There is a simple reason health care in the United States costs more than it does anywhere else: The prices are higher.

Really! It is almost that damned simple.  This graphic or the table version in the Star is infuriating and eye opening. 

Of course it’s not an explanation in and of itself and one could take Mr. Klein’s piece as a pointless frontal attack on the health care industry but the point is much more subtle. As I have discussed broadly before the issue is that things cost as much as they do because the way the current system creates vast inequality almost on purpose through weak and or distorted pricing signals.

A Gifted Man is a great TV show….how is that relevant? In it Michael Holt a brilliant neurosurgeon finds himself ‘gifted’ with the ghost of his wife, a socially conscious doctor who he had divorced (apparently amicably) years before.  While Michael runs Holt Neuro, an extreme high end clinic for the wealthy and powerful, Anna is running a Free Clinic, Clinca Sanando, in a poor section of the city (NewYork though its portrayed as almost any city.)  Anna has been killed in a hit and run, and her ghost goads him into helping the free clinic which is on the edge of folding.  (I could go on, its good TV but won’t.)

The thing is A Gifted Man points out without grinding ones nose in it the huge disparity in health care between the rich and the poor.  It also make the point that one can do good even superior general medicine in very spartan conditions if you have a dedicated and reasonably competent crew.  You can do even more if you back that up with truly superb facilities for those who need it, but those facilities are very expensive and somehow need to be supported by the clients. 

Now the the article points out the cost of medicine in many countries with more socialized medicine and I grew up in England then in middle class America where the conditions in the Doctors office were more reminiscent of the Clinica than Holt, today, I’m middle upper middle economic tranche and all the offices are much more like Holt than the Clinica, but why? Partially because I bitch if I have to wait for an appointment, and partly because I never see the cost until after the fact (except for dental work beyond the basics…becuase many more people lack dental coverage than lack general health insurance.)  In most ways the reason I go to my general practitioner is because he (or his office) keeps track of my overall health and is a central repository of my health records and I value that.  I’d value it even more if I could see it as a cost rather than an overhead hidden in the other post facto numbers I get….in no other part of my life do I have such uncertainty about the cost and yes perhaps because its hidden I’m not as reticent about going, because I know that in the end I can afford it, but many others are not as lucky and the uncertainty is discouraging, and then there are the folks with no coverage, who get bills many times what I pay…in some part because the Medical Establishment figures that in the end with many of those folks will end up paying pennies on the dollar, if you multiply the dollar by some large factor then the ME is more likely to at least cover costs one way or another.

 I do not ever feel that Micheal Holt does not deserve Holt Neuro or that the folks at the Clinica should have unfettered access to Holt Neuro.  I do not (most of the time) begrudge the well off hospitals their cathedral like front lobbies.  I do feel that the system is seriously distorting the messaging power of pricing and under suppressing the power of pricing the Medical Establishment hold because we are all frail humans who if not now then one day will have health issues to deal with.

Establish portable health savings accounts and require published pricing for standard procedures based on standard practice codes (and all procedures should have such codes and a cost you can find if you look or enquire.)  Don’t take away the tax advantages of the coverage companies provide, but extend it to everyone who buys their own insurance.  Reduce that tax advantage over a couple of decades.  Allow insurance companies to negotiate costs but they have to do so based on standard codes and publish some metric of what they are paying, make it illegal to charge different customers different prices for the same procedure (and don’t allow rebadging, the procedure codes have to be the same for all customers.)   Make it illegal for companies to charge different people different insurance rates, insurance takes into account your age and that’s it, different insurance companies can sell different sets of coverage and different age windows but that’s it.   Make the market place fair and flat.  An actuaries job is to make sure the insurance company collects enough money to cover its costs and make a reasonable profit! But again they have to publish their rates and compete for customers and if the marketplace is open and fair the prices will drop to the minium that covers costs and reasonable profits.

Advertisements

GM Reveals Dismal Volt Sales in January – Technology Review

GM Reveals Dismal Volt Sales in January – Technology Review.

The Volt is a pretty car but it’s just too expensive and too Me-to to gain real share.  The Prius is a Toyota and as such, up scale yuppies don’t feel down class when driving it, they feel virtuous. 

While the Chevy Brand is beloved by many middle class Americans it’s loved for its trucks and muscle cars, edgier yuppies buy Cadillacs.  If the Volt had been a Caddy and a bit more of everything:  bigger, striking, powerful, EXPENSIVE it might have had a better chance.  Yuppies feel dissed in a Chevy, however green, and the Red Staters aren’t going to buy a smaller, slower, more expensive car when they can get one of the quality new generation GMs, Fords or Chryslers for a few pennies more or less.

A Couple of Positives| Down with Ethanol! | Up with Capitalism!!!

Corn...worst source of ethanol ever

Corn...worst source of ethanol ever

So the Atlantic says that the Tea Party has ended the ethanol subsidy.  As if! The only thing that has ended is the Tax Credit, the rules about the % of ethanol in gas are still there and probably more important overall.  The basic problem of ethanol being a terrible source of ethanol is not solved.  Apparently we have started shipping some ethanol overseas, I’d like to know how that happened, I suspect other subsidies. 

One problem with subsidy systems like that set up for Ethanol is that they become terrifically difficult to remove.  An entrenched special interest is created and they have a lot more pull than is generated by the general by very dispersed understanding that it’s a waste of money, the guys who know it’s a waste aren’t losing enough individually to make it worth while fighting the long war to overturn the subsidy.  So to a degree the Tea Party may have done good, concentrating the anti vote enough to do something, hopefully they can move on to other subsidies.

<<<Nuf Said on That Topic>>>

A link to Blomberg from the Atlantic lead to this article A Crisis of Leadership, Not a Crisis of Capitalism by Clive Crook :

With the world’s rich economies struggling and the leaders of the European Union intent on making things worse, the gravity of the economic crisis still confronting the West is hard to exaggerate. Nonetheless, it can be done.

According to what I read, we face not just the worst recession since the 1930s, but a challenge to the West’s entire economic order. The Great Recession exposes the poverty of orthodox economics. It constitutes an ideological crisis. It shows that capitalism itself is “fundamentally” flawed. If all this were true, I’d be a lot more worried about the coming year than I am — which is saying something.

A new year’s corrective is in order. Reports of the death of capitalism are greatly exaggerated.

What’s surprising is just how wrong those reports have been. Perhaps, as I write, the revolutionaries are organizing in secret, but I see no signs of a popular uprising.

Commercial Crew Launch funding issues cause concerns

Spaceflight Now | Breaking News | NASA decision increases risk in commercial crew program.

Congress short funded the commercial ISS crew/cargo program (by 1/2!!!!) the only good result being the continued use of cooperative agreement funding tools rather than the (potentially) more controlling fixed price contracts. Some concerns about delays and risks are very appropriate but it’s possible this not all bad. One of the comments pointed out that the senatorial launch system got funded as well and suggests a great solution, take some of the SLS money for CCL and then offer the big launcher requirement up to the eSpace competitors for solution on a commercial basis.

This is a very clear explanation of what went wrong with the US Housing market over a very long time.

Big problems rarely appear from nowhere….this piece from the American Interest  jives with many other articles, puts it in a longer context.

Fannie, Freddie and the House of Cards

By Mary Martell

“Fannie Mae and Freddie Mac (collectively the two largest “GSEs”, or government-sponsored enterprises) have engaged in a broad range of residential mortgage activities for many years.1 The economic disaster of recent times has drawn considerable attention to Freddie and Fannie, which is not surprising considering the role that the mortgage sector of the U.S. banking system played in that debacle. Together the two institutions hold or pool about $5 trillion worth of mortgages, and so sketchy were their operations that in September 2008 the U.S. government had to bail them out and place them in conservatorship to keep the entire mortgage market from imploding. While the U.S. government has by now been made whole by TARP-assisted banks, it is not clear whether the billions of dollars provided to keep Fannie Mae and Freddie Mac afloat will ever be returned to the U.S. Treasury.”

Read the whole thing