The Covert Rationing Blog

Government-Run Healthcare “Despite” Obama?

November 6th, 2008 by DrRich

In his campaign, President-elect Obama did not promise or even advocate a universal healthcare system controlled by the government. Indeed, he referred to government-run healthcare as an “extreme” option that ought to be avoided. Instead, he advocated a system in which people who liked their current health insurance would be permitted to keep it, while those who did not have health insurance or who did not like their current insurance would be able to join a new government insurance plan, based on the plan “available to members of Congress.”

Conservatives and cynics, of course, pointed out that such a plan amounted only to a stealth government takeover of healthcare. Since the new government insurance plan would be competing with private insurance, and since the government would be establishing the rules of competition, it would be a simple matter to arrange things so that, before too long, the private competition would melt away.

As a matter of fact, DrRich himself painted such a scenario, and even suggested that the insurance company executives were supporting Obama over McCain during the election precisely because Obama would present them with a graceful (and lucrative) exit strategy. (Mr. McCain’s plan, in contrast, relied on insurance companies to invent the “efficiencies” that would control healthcare costs, as if the insurance companies hadn’t already been trying unsuccessfully to control those costs for 20 years, and were not already completely bereft of useful ideas.)

The fervent wish of the insurance executives, DrRich surmised, was this: Mr. Obama would provide them with one last, huge windfall, in the form of government-provided premiums for some significant chunk of the 47 million uninsured Americans. Then (DrRich went on) a couple of years later and having realized their final gains, they would get out of the health insurance business altogether and let the feds have the whole mess.

But now, things have changed.

Thanks to the sub-prime mortgage crisis and the economic meltdown that has resulted, it will be difficult if not impossible for Mr. Obama to implement any sort of organized healthcare reform, or any other reform that promises to greatly increase federal spending. (Dick Morris points out in a column today that the realities of our current economic situation will serve as a general constraint to the Democrats now controlling the administration and both houses of Congress.)

But if Obama-style healthcare reform is off the table, or even significantly delayed, the health insurance companies are likely to be in deep trouble - and soon.

The market value (i.e., stock price) of these companies completely relies on their continued growth. Through the 1990s and for the first half of this decade, their growth was spurred by the acquisition of public assets (not-for-profit institutions) at a tiny fraction of their real value, and on mergers and acquisitions among insurers. But there are no more non-profits to take over, and these companies have pretty much run out the string on mergers.  So, for the past few years their growth has almost solely relied on their participation in government programs such as the Medicare Advantage Plans (which, by the way, may be going away soon given the recent election results). The entire prospect for future growth (and therefore viability) in the health insurance industry, as DrRich has explained, depends on an Obama-style expansion of government programs that will provide a new stream of insurance premiums.

One sure thing is that health insurance companies have no hope of even maintaining their current profitability, let alone continuing their growth, solely by doing what they are supposed to be doing - by managing the healthcare of their enrollees. (The prospect of having to survive by doing that, once again, is what frightened them so much about the McCain plan.)

Panicked insurance company executives are not in a pretty place. On top of a mounting recession in which their customers (American businesses) are cutting back or failing, and during which their own costs continue to increase at a double-digit rate of inflation, they now have to face the likelihood that in spite of Mr. Obama’s election there won’t be a massive infusion of government dollars into their businesses any time soon. These poor souls are very likely casting about for a Plan B.

And Plan B seems pretty obvious to DrRich. The path has been very recently blazed by others.

Over the last two months it has become obvious that when businesses vital to the public welfare are about to fail, the government has little choice but to take them over. This was the case with AIG, with Fanny and Freddy, and to a lesser extent with several major banks.  We now see the American auto industry lining up for a bailout/takeover. It is easy to imagine the gasping airline companies forming themselves up into the same landing pattern.

So if you are a health insurance executive, you are probably looking at your current broken business model, lamenting that your savior Mr. Obama is probably not going to be able to come to your rescue with the one last windfall he has promised, and observing what is happening with other “vital” American industries in similar straits.  DrRich imagines that these executives have already resolved themselves to a government takeover (indeed, this was the end-game they have long planned once their last Obama windfall played itself out), and that they are merely calculating the right moment for it. How best to divest their stock before hinting that such a takeover is in the works? With careful planning and negotiation, can some of the takeover money be parlayed into executive bonuses, or at least into one last, extravagant junket (a la AIG)? There is no real hurry, after all - whenever the health insurance industry says it just can’t do this any more and that the government needs to take over healthcare, then no matter which other industries the government will have already acquired, what choice will the feds have?

If DrRich is right in such speculations, we may end up with government-run healthcare  sooner than we think, despite the promises and intentions of Mr. Obama, and despite the seeming unlikelihood of achieving organized healthcare reform in the foreseeable future.

DrRich humbly suggests that those who currently own stock in health insurance companies should take note of what happened to the shareholders of AIG and other companies whose demise the feds have recently engineered - which is to say, they were completely wiped out.  DrRich is not really trying to give investment advice here, and admits to being entirely unqualified to do so, as anyone would agree who saw his portfolio. He’s just sayin’.

Posted in Gekkonian Rationing, Healthcare economics, Investment "advice" | 5 Comments »

The Real Reason Americans Have a Right to Healthcare

October 30th, 2008 by DrRich

In recent posts (here, here and here), DrRich has considered the legitimacy and the implications of our recently-announced right to healthcare.

In one of those “meditations” DrRich decided that declaring healthcare to be a right is indeed legitimate, but not because it is the only humane thing to do, or because there is some sort of a natural right to healthcare, but rather, due to the BOSS rule (that is, Because Obama Says So), which is simply another manifestation of the longstanding principle that the sovereign authority gets to declare anything he/she/it wishes to be a right.

At this time, DrRich wishes to drop his usual sarcasm, to the furthest extent possible, and explain why Americans in truth have a legitimate claim to a right to healthcare - even if the electorate (through some unaccountable fluke) should fail to consummate their promised elevation of Mr. Obama, thus, incredibly, negating the BOSS rule.

In short, Americans have a right to healthcare because they’re paying for it.

Under our present system, every person living in the United States is sharing in the cost of healthcare for every person who receives healthcare. Let us list some of the ways in which this is true:

1)    Anyone receiving a paycheck is subject to payroll deductions to pay for Medicare for the elderly and Medicaid for the poor.
2)    Anyone paying income tax is paying higher tax rates to offset tax-deductible health insurance premiums purchased by businesses for their employees. (That is, employer-provided health insurance is subsidized by the taxpayer.)
3)    Anyone buying products in the U.S. is paying higher prices to cover the healthcare costs of American businesses.
4)    Anyone living in America is sharing in the massive societal burden we are creating by allowing healthcare spending to be passed off to future generations, by way of the national debt.

These costs, and more, are borne by everybody living in the U.S.  Since everyone in one or more ways is paying for healthcare, everyone has a just claim - a right - to some of that healthcare.

It is important to notice that this argument for a right to healthcare is fundamentally different from the arguments typically given.  Typically, a right to healthcare takes on the characteristics of an entitlement, a grant bestowed on individuals by society just because of who they are (such as, citizens, people over 65 years of age, etc.)  A right like this - an entitlement - is rarely taken away, or even limited, once granted.  Entitlements are soon seen by their recipients (and by the bureaucracy that administers and regulates them) as something that is owed forever, as a natural, God-given right, which can always be expanded, but never ever restricted.

In contrast, the right to healthcare which DrRich is describing is not “granted” to an individual by a beneficent society because of some inherent characteristic of the recipient, but rather, comes into being solely as a result of their being party to a social contract, under which healthcare is a consideration given in return for certain obligations the individual makes to society.  Those obligations would include paying for the publicly-funded healthcare through taxes, and subjecting oneself to whatever limits to publicly-funded healthcare such a system requires in order to maintain societal integrity.

This kind of contractual right to healthcare would enable us to set necessary limits on what we mean by healthcare. There would no longer be an obligation to provide individuals with every manner of available healthcare under all circumstances, but only to provide individuals with that level of healthcare provided as a public benefit to all other individuals, under the terms of the social contract. (An entitlement, in contrast, generally is an open-ended promise in which “healthcare” comprises anything and everything one might think has any possibility of restoring every bit of health.)

To summarize, as DrRich sees it we have already created an obligation to provide publicly-funded healthcare to all individuals, by virtue of the fact that we have already burdened every individual with the cost of healthcare for anyone who is now receiving it.  We might as well own up to our responsibilities with a formal contract that recognizes the widely-shared cost of American healthcare, that recognizes the right of all Americans to the considerations that arise from this widely-shared burden, and that establishes clear limits to the obligations borne by the parties, limits that are part of any legitimate contract.

Such a social contract will finally give us the framework we need for a public discussion on setting necessary limits on publicly-subsidized healthcare spending.

Posted in A right to healthcare | 3 Comments »

Why Conservatives Shouldn’t Sweat Our New Right to Healthcare

October 27th, 2008 by DrRich

In response to a couple of recent posts (here and here) defending the declaration by President-Nearly-Elect Obama that healthcare is a right, several readers have offered comments indicating that simply declaring healthcare to be a right is not very useful, unless you also clearly say what you mean by “healthcare.”

This is indeed the question. Exactly how much healthcare are you entitled to if you have a right to healthcare?  Do you have a right to certain specified healthcare services, to a certain dollar amount of healthcare per year or per lifetime, to whatever healthcare it takes to achieve perfect health, or to some other limit or non-limit?

The question of limits (whether we should have them or not, and what should they be) has been a central theme of this blog and of DrRich’s book.  To reiterate the fundamental problem: 1) In America we believe that it is wrong to limit healthcare in any way, that everyone is entitled to the very best healthcare, that any bit of healthcare that offers even a small potential of benefit should be provided, and that death itself is merely a manifestation of insufficient research (or actionable incompetence, or systematic discrimination against the unwealthy, or corporate greed).  2) But against that closely held belief, we must balance the unremitting law of economics which tells us that there is simply not enough money in the known universe to buy all the healthcare that might potentially offer some small amount of benefit to every person.  Healthcare spending has to be limited, or it will become a fiscal black hole.*

Our insistence upon simultaneously balancing these two utterly incompatible factors (the rock-solid belief that there are and can be no limits vs. the unalterable law that limits are unavoidable) requires us to do the necessary rationing of our healthcare (that is, withholding at least some potentially useful healthcare from at least some of the people who might benefit from it) covertly.

So, our entire healthcare system, from all three branches of the government, to health insurance companies, to hospitals, to doctors, to individual Americans (at least when they themselves are not actively patients), are fully and extravagantly and enthusiastically engaged in covert rationing, by a thousand different mechanisms, some of which have been chronicled here.

One reason DrRich is not as reluctant as some to accede to the notion that healthcare is a right is that such a declaration might, at last, move us closer to the day when we will actually be forced to engage in a public discussion of what we mean by healthcare; that is, will move us closer to deciding what should be the limits of healthcare.

Consider: When we have tens of millions of uninsured Americans who don’t have ready access to regular and routine healthcare, then it’s relatively easy to pretend that “healthcare” should include everything we might want it to include.  By using the uninsured as a huge fiscal safety valve for our dysfunctional healthcare system - a valve that can be opened, as needed, to increase the number of people ineligible to consume routine healthcare - we can shore up the fiction that “healthcare” ought to have no limits. (Indeed, steadily increasing the number of uninsured Americans has become perhaps our most effective mechanism of covert rationing). This simple expediency alone goes a long way toward enabling us to avoid having to consider or discuss limits.

But once healthcare becomes a right, then presumably those (currently) 47 million Americans will suddenly have a claim to equal access to whatever it turns out we mean by healthcare.  The severe fiscal stress produced by this sudden influx of entitled Americans will likely force us, finally,  to explicitly define the limits of what we should expect from our healthcare system.

Defining those limits will be extraordinarily painful, and will very probably traumatize our social structure. However, the process is necessary, because if we fail to set those limits the resulting fiscal tsunami - which will utterly dwarf the economic trifle we’re dealing with today as a result of the mortgage crisis - will leave us without any social structure to traumatize.

If declaring healthcare to be a right causes us to engage in this painful exercise now, before it is too late, then DrRich is in favor of it. Even American conservatives ought to be thanking Mr. Obama for doing his bit to bring the issue to a head.

*In contrast, our national, de facto declared right to affordable mortgages for everyone, no matter one’s credit risk, will result in some finite, limited amount of national debt, since every home has some finite, limited value. Even if the final cost to society is very, very large, a national right to home ownership in fact results in a fiscal obligation for society that is limited and quantifiable, and in one way or another is therefore ultimately manageable.

Anyone who insists that there must also be similar inherent limits on what we can spend on healthcare should simply consider that once we have artificial hearts, artificial kidneys, artificial livers, and can indefinitely preserve brain function sufficient to, perhaps, plug aged-but-medically-preserved bodies into some sort of virtual reality where they can frolic like virtual children forever (DrRich does not really know what medical immortality will turn out to look like, just that it is the ultimate goal of medical research, as any real American can tell you), then the amount of money we can spend on any given individual’s healthcare becomes limitless.  It is indeed nearly limitless with just the stuff we have today.

Posted in A right to healthcare | 6 Comments »

More Implications of Our Right to Healthcare

October 20th, 2008 by DrRich

Last week, DrRich defended Mr. Obama’s recent declaration that healthcare is a right.  DrRich’s defense was not based on the idea that awarding Americans a right to healthcare is inherently a proper and necessary thing to do, or that a right to healthcare is one of those natural, God-given rights we Americans used to celebrate (like life, liberty or the pursuit of happiness), but rather, that the sovereign authority (i.e., that authority within any society which has the ultimate capacity to force its will by the exertion of violence) can declare anything they wish to be a right. So if Mr. Obama (presumptive President-elect, and soon-to-be wielder of sovereign authority) says healthcare is a right, then it’s a right.

DrRich understands, of course, that our Constitution in its very first paragraph awards sovereignty to “We the People,” and that the rest of the document goes on to specify the limits of governmental authority, and that those limits are most specifically spelled out in the Bill of Rights (which actually does not award rights to the people, the rights of the people being granted by “nature,” but instead explicitly lays out a few of the limits on the government’s ability to intrude on God-given individual sovereignty).

But DrRich has also been taught, by the unambiguous verbiage of our political leaders and by decades of observation of actual governmental actions, that the Constitution is a “living document,” which means that the government may grow its authority as needed in order to deal with perceived social (or financial) crises, or political exigencies.

Simply put, the responsibility for American healthcare, being both a social crisis and a political exigency, certainly fits as one of those items that heretofore has fallen to individuals, but that the government may now choose to take upon itself without violating any really important precedent.

And indeed, it has so been declared.

To his fellow conservative Americans, DrRich wishes to assure that really, this is not such an extraordinary step as many seem to think.

DrRich has heard it said, by those who disparage healthcare as a right, that this is a dangerous step, that, if the government awards Americans a right to healthcare, then what’s to stop the government from also awarding them a right to food, clothing, and shelter (the lack of which would pose a much more dire problem to the vast majority of people than a mere lack of healthcare)?

To which DrRich replies: Where have you been for the past two months?  The housing crisis, the near collapse of our financial markets, and the extraordinary taxpayer bailout that will burden our progeny down through the generations, all amount merely to partial payment for the decision by our duly-elected representatives (and the policies and actions that naturally derive from that decision) that all Americans should have access to an affordable mortgage (or, for that matter, mortgages). That is, we are simply getting a first look at the bill that is coming due thanks to a government-declared right to a house.  And when we are finished, it appears, our government will own the actual mortgages, the government-backed entities (Fannie and Freddie) that support the mortgages, and even large chunks of the banks themselves that do the original lending (several of which, last week, were forced against their will - in a graphic demonstration of the definition of sovereignty - to accept a federal buy-in of their institutions).

So be soothed. The right to healthcare is simply a natural extension of the already extant idea that the government should supply (and control, and therefore, own) all the necessities of life.

There’s a lot to learn from studying societies in which governments have taken on this role. Several such societies have risen (and fallen) just over the past century.  We who worry about the cost of healthcare perhaps can take solace in the fact that, in all of these societies, the notion of “healthcare” quickly came to be seen as the extravagant luxury it has been throughout most of human history, rather than a fundamental necessity.  People enduring famine and exposure (or, at best, inanition) have relatively low expectations regarding healthcare.

In other words, as we look at the real implications of the recent taxpayer bailout of our financial system (engineered by a Republican administration), and at the fact that we are about to elect a Democrat President whose stated aim is to spread the wealth around, a right to healthcare actually becomes a relatively unimportant consideration. Socialism invariably reduces the people’s expectations to the point where it should become relatively easy to pay for our new right to healthcare. So, not to worry.

Posted in A right to healthcare | 6 Comments »

Healthcare Is a Right If the Authority Says It Is

October 14th, 2008 by DrRich

DrRich has been traveling, so he is late to comment on the presidential debate last week in which our presumptive next President declared that healthcare is a right for all Americans. (In contrast, Mr. McCain said healthcare is merely a responsibility, but since he’s only a Senator we can safely discount his opinion on the matter.)

Medical bloggers far more notable than DrRich have since provided commentary on whether healthcare ought really to be called a right.  DrRich particularly recommends posts by Shadowfax and Maggie Mahar, both of whom offer beautifully nuanced arguments which are singularly interesting in that, while both of them are American progressives who favor both universal healthcare and Mr. Obama, neither is quite willing to label healthcare a right.  Presumably, when awarded too (as it were) liberally, the granting of new “rights” raises the hackles of too many people. Rather, after much analysis and thought, they prefer to call healthcare either an entitlement (Shadofax) or a moral obligation (Ms. Mahar).

DrRich, being a relatively conservative American, does not do well with such nuances.  In his simplistic, Palin-esque way of seeing things, nuances (even when he is too thick to follow them) are fine if they draw meaningful distinctions. But they are not so fine when they are invoked chiefly to disguise or confuse.

The Stanford Encyclopedia of Philosophy says that a right is an entitlement to perform certain actions or to be in certain states, or an entitlement that others perform certain actions or to be in certain states. In other words, a right is simply an entitlement, or an obligation imposed on others, or both.  So, when some insist on calling healthcare an entitlement or an obligation instead of a right, they are merely engaging in soothing obfuscation.

DrRich is sorry to say that the common argument that conservatives like to use against creating a “right” to healthcare - that there is no such thing as a right that imposes obligations or limitations on the individual rights of others - is mistaken.  This is easy to see when one considers certain of the rights that have been legally promulgated during the course of human history, such as the exceptional rights of the aristocracy (especially the divine rights of kings), the unique rights of the clergy, or the special rights of the politburo (or the Congress), all of which clearly imposed more-or-less oppressive obligations on, and limited the individual rights of, the masses.

Where we conservatives tend to get confused is by the notion of natural rights, such as those natural rights to life, liberty and the pursuit of happiness enumerated in our Declaration of Independence. Natural rights are equal rights granted to all people by the Creator (or by “nature”), and cannot be legitimately modified by any mere governmental authority.

Conservatives tend to forget that there is also such a thing as legal rights, which are man-made, created by legislation (or decree, depending on the governmental structure), are not necessarily equally distributed to all people, and are subject to amendment and modification at any time.  In many cases governments will find that, for the overall benefit of the society, or of some subset of society (or even of the governing class), a new “right” will be necessary that produces a limitation on the freedoms or property of individuals within that society, and that those limitations are often not equally distributed.  The progressive income tax, eminent domain, and the military draft immediately come to mind, all of which have been used in countless ways to support innumerable legal rights the government has granted to some or all Americans.

So, DrRich’s message to his progressive friends is: Don’t sweat the “healthcare is a right” kerfuffle. The now-nearly-official right to healthcare is not fundamentally different from other obligations and entitlements that the government has granted to or imposed on American citizens over the years, particularly over the past 70 years.  There is plenty of precedent for it, which should be immediately obvious even to many of us conservatives once you take a second to explain it to us.

So, now that President-Nearly-Elect Obama has decreed it to be so, just go ahead and use the “R” word, and save your nuances for other times when they might be more necessary.

Posted in General Rationing Issues, A right to healthcare | 2 Comments »

The Duty To Abort

September 15th, 2008 by DrRich

There are, it would appear by reading newspapers and watching TV, many reasons not to like Sarah Palin, and even more reasons not to approve of her.  Indeed, on the very day Governor Palin was announced as Senator McCain’s running mate, DrRich said to his own lovely bride of these past 35 years, “I hope Ms. Palin has Clarence Thomas’ phone number. She’s going to need some advice.”

Clarence Thomas, of course, is the Supreme Court Justice who is masquerading as an African American (his credentials as an actual black person having been thoroughly and systematically discredited by the diversity establishment, by virtue of his conservatism, during his confirmation “hearings”).

“Why, whatever do you mean?” asked DrRich’s sweet-hearted spouse.

“Just look at her,” DrRich replied. “There she stands: Sarah ‘Jesus, Babies and Guns’ Palin. Why, she’s the embodiment of the rubes Senator Obama talks about, the ones that cling in their misery to their Bibles and their varmint guns, and that keep making babies because they’re just too dim to figure out how to prevent it, and probably even too dim to figure out what causes them in the first place.  In other words, she’s conservative.  So by definition she’s no more a woman than Clarence Thomas is black. If she’s allowed to pass herself off as a legitimate (much less celebrated) embodiment of American womanhood, it will set the Movement back to the days of Ozzie and Harriet. So she’d better put on some thick skin because it’s going to get very nasty and very ugly very quickly.”

All of this, of course, has since come to pass. Why, Wendy Doniger, who is a Professor of the History of Religions at the University of Chicago’s Divinity School, and so who has the formal authority to rule on such things, has even established in her Newsweek blog that Ms. Palin is not actually a woman. (”Her greatest hypocrisy is in her pretense that she is a woman.”)  You can’t actually be a card-carrying woman, you see, and say and do the stuff that Ms. Palin says and does.  Any educated person can see that, and it’s good that the very well educated are taking the time to inform the rest of us.

So, like DrRich says, there are many reasons not to approve of Sarah Palin, some based on facts and some confabulated from a general knowledge of the kind of things primitives like her might believe, and all of them are being well and thoroughly (and desperately) documented for the public record by a panicky media establishment, with every hope and confidence that, once fully informed, no thoughtful person could ever actually vote for one such as she.

But as cynical as he is, and as savage as he expected the attacks to be, there is one criticism being made of Ms. Palin that took even DrRich by surprise.  DrRich refers to the criticism she is receiving for failing to abort the latest addition to her family, her little son Trig, even though she learned while pregnant that he would likely have Down syndrome.

When DrRich was in medical school oh so many decades ago, children with Down syndrome were still largely institutionalized from birth. So when DrRich was being taught about Down syndrome he was shown pictures and movies of drooling children who were unable to speak or communicate meaningfully, and who were unable to feed themselves, use toilets, or interact as humans.

But of course, if you were to place any of today’s Baby Einsteins in such an institution from birth, they would end up much the same way. And once the era of institutionalization ended, and many Down children were raised instead with their families, amazingly we learned just how normal these kids could become.

When Down children are raised in the home by loving and caring families, it turns out that most of them become highly functional. DrRich knows people with Down syndrome, and finds them to be good-natured (most of the time), articulate, thoughtful and even witty, and they are not only quite capable of providing for themselves their basic human needs, but also of earning a living.  Above all, they are happy to be alive, and their families are as happy to have them as they are any of their other children and they love them just as much.  Of course, they do have problems, including a high incidence of cardiac abnormalities that need to be surgically corrected, and a relatively high risk of developing leukemia and infectious diseases. But these are fully-realized humans who enjoy their lives and have much to offer.

So if a pregnant woman finds out she is carrying a Down child, she has a lot to think about.  There are a lot of potential problems with these special-needs children, and not every family is prepared to deal with these problems.  But on the other hand, the experience of raising a Down child can be extremely rewarding - for everyone. So as DrRich sees it, the decision to deliver a Down child and welcome him/her into the family is at least a reasonable one, if not a blessed one.

So at first DrRich was a bit puzzled by the criticism being heaped upon Ms. Palin for keeping Trig.  At first, he thought this unreasonable complaint was simply one of the many things being caught up in the pile of indiscriminate criticisms being leveled against her during that first mad rush to discredit her, to shame McCain into dropping her from the ticket immediately. Surely, nobody could really hate her for intentionally delivering a Down child.

But even when the mainstream media realized that it had overplayed its hand a bit, and began to settle down to some of the more reasonable criticisms of Ms. Palin (her inexperience in foreign affairs, for instance, which is every bit as troublesome as Mr. Obama’s), the issue of her having chosen not to abort her Down child did not go away.

The complaints, of course, are couched in terms of concern. A mother with a special-needs child should devote her efforts to the child, so it is clearly inadvisable for such a mother to seek the Vice Presidency. But while they express concern for the wellbeing of the child, their underlying tone is clearly one of approbation, and the criticism rings of false indignation. Since when does the women’s movement become so vociferously exercised because a working mother is not spending enough time with her children, whatever the needs of the children?

Besides, DrRich respectfully reminds critics of Ms. Palin that the Vice Presidency is famously a job with no responsibilities whatsoever (unless the President dies, of course, in which case a new VP is tapped to sit around and do nothing).  In practical terms, being VP is the perfect job for any mother with a special-needs child, and it will certainly allow Ms. Palin to spend more time with her family than she ever could as Governor of Alaska, or even as Mayor of Wasila.  Only being a Senator would approach the suitability of this job for a mother with family responsibilities, judging from  (as demonstrated by Senators Obama, McCain and Biden) the massive amounts of time for which it is apparently perfectly OK not to show up for work. In fact, mothers with special needs-children ought to be harshly and publicly condemned if they do NOT seek the Vice Presidency of the United States.

No, there is clearly something more going on here than mere indignation that Ms. Palin is seeking a job that will take her away from her family.  And gradually, DrRich has figured out what that is.

Ms. Palin had a duty to abort Trig, and she failed to discharge that duty.  By so failing, she has abandoned, by her own choice, any claim she may have had to the title “woman,” and certainly any claim she may have had on the sympathy, much less support, of other women.

It is one thing to deliver a special-needs child who cannot be identified prenatally as having special needs. Women with such children are simply victims of the draw, and are to be pitied and supported in every way possible, with whatever public funds that may require.  Women should not be punished with such an unforeseen and unpreventable burden, foisted on them by chance, or, if there is a God, then by the divine MCP (which is one reason why the notion of a divinity is so abhorrent to so many of the leftward persuasion - if God exists, he’s certainly stacked the cards against everyone except white males).  Such a child is one of the worst things that can happen to an independent, self-actualized, competitive modern woman. Any real woman who cares about the child, who cares about herself, and who cares about doing what’s best for all women would abort that child whenever possible.

The idea that a woman who actually had a choice would cheerfully choose to have a child with Down syndrome seriously undermines the argument.  Such a woman is clearly ignorant or stupid, and must have (through their ignorance or stupidity) bought into the old-fashioned, male-dominant paradigm that we enlightened folks have fought so hard to overcome.  When women like this do their thing in Wasila, Alaska, one merely shakes one’s head at the backwardness of it all, and consoles oneself that, some day, the truth will filter out even to these bush people.

But the idea that a woman, once making such a poor decision, would then not just quietly slink along through her life, privately bearing the burden of her poor choice; the idea that such a woman indeed would allow herself (and even seek) to become well-known, and to run for public office, much less seek the second highest office in the land; the idea that such a woman could become not only popular but publicly acclaimed and even adored - why, such an idea is utterly anathema. This woman calls into question the fundamental tenets of the Movement.

This explains one aspect of the approbation being heaped upon Sarah Palin for choosing to give birth to a Down child. She has made mortal enemies of the extreme women’s movement, and they need to destroy her at whatever the cost.

But another aspect of it (and one that finally resonates with the theme of this blog), is that Ms. Palin is setting an example that, if followed by admiring women, will cost the healthcare system a lot of money. Down children, for a variety of reasons, often need a lot of expensive medical care.  And by actively campaigning to encourage women to abort their babies if pre-natal testing suggests a high risk of Down syndrome (by describing to the stunned mother-to-be the institutionalized Down child of the 1960s, by outlining the horrors of heart surgery and other medical issues that may occur, and by neglecting to mention that Down children most often become completely fulfilled and completely lovable people who bear their trials with grace and humor, and who actually have a lot to teach us), obstetricians in the US, Canada and many European countries have succeeded in sending over 90% of Down pregnancies to abortion in recent years.  Sarah Palin, especially if she remains popular, and most especially if Trig grows up in public view and becomes a beloved example of the potential of Down children, threatens to cause many women to consider their options more carefully. And that will cost society big time, as a prominent Canadian obstetrician has pointed out.

Women who have chosen to deliver their Down babies are today being subtly scorned by society. Women have a duty to their gender and to society to abort those babies, and when they choose otherwise they are displaying serious psychopathology and sociopathy.  It is becoming very difficult for women to do otherwise.

Sarah Palin threatens to change the paradigm. Perhaps she already has. The duty to abort has been hard fought and hard won. Palin has got to be stopped.

And that explains at least some of the passionate attacks from people who, one would think, would normally celebrate the ascendancy of a strong woman who has succeeded at a man’s game while remaining an admirable wife and mother.

DrRich will end by pointing out that the duty to abort disabled children (a duty that, thanks to Sarah Palin, is obvious today for all to see), is really no different than the coming duty to accept assisted suicide or euthanasia.  Observing the attacks on Ms. Palin has made DrRich realize that we are farther along that road than he had thought.

Posted in General Rationing Issues, Medical ethics | 4 Comments »

Why Big Health Insurance Supports the Democrats

May 30th, 2008 by DrRich

As difficult as it undoubtedly will be for most readers to believe, DrRich still hears from skeptics who ridicule his theory that a Democratic victory this fall will be the best thing that could happen to the health insurance industry. For example, consider this from Anonymous in Montana:

Democrats hate ALL corporations and want to eliminate profit as a concept. Democrats believe that the most evil companies in all the evil corporate world are the murderous health insurance outfits, because they make their filthy profits withholding healthcare from the sick. If the Democrats win this fall the health insurance industry is toast. For you to suggest that the health insurance industry will be better off with a Democratic victory is nonsense. And suggesting that the insurance industry will support the Democratic candidate is dumber than suggesting that Smith & Wesson will be a big Obama booster. You twit.

DrRich has not given much thought to which candidate the armaments industry will be supporting this year. He expects it will be Mr. McCain, who once operated some pretty impressive firepower himself. On the other hand, one could easily predict a huge boost in gun sales if Mr. Obama wins, triggered by concern (among those Bible-thumping, gun-toting non-supporters) over the possible repeal of the 2nd amendment. So, Smith & Wesson’s support could go either way. DrRich will have to consider the matter further.

But, my dear Anonymous, in regard to which candidates the health insurance industry will be supporting this year, the verdict is already in.

The Wall Street Journal Health Blog reported this week that the health industry has suddenly shifted from a preference for Republicans to a preference for Democrats. Specifically, political contributions from the health sector are showing a 55% to 45% split in favor of Democrats. This is a reversal of the traditional split that for at least 20 years has strongly favored Republicans.

Furthermore, a visit to the website of the Center for Responsive Politics, which tracks these sorts of data, will show that political contributions from HMOs (i.e., the big insurers) has trended even more strongly in favor of Democrats: 69% for Democratic candidates, and only 31% for Republicans. This is a Hillary-in-West-Virginia-magnitude rout.

Non-readers of this blog (and, of course, Anonymous) will be surprised by these statistics. After all, both Mr. Obama and Ms. Clinton propose to phase-out private health insurers (though they won’t come right out and say so) by attrition, by forcing them to compete for subscribers with a new government-sponsored, taxpayer-subsidized “Medicare for Everyone” health plan. Mr. McCain, on the other hand, proposes to maintain private health insurance as the backbone of the American healthcare system, relying nearly entirely on this industry as the engine for healthcare reform. So why would HMOs be giving financial aid to Obama/Clinton and not to McCain?

DrRich’s theory, first formulated six months ago, provides the answer. In the evolution of their managed care products, health insurers finally have reached the point where they need to demonstrate their ability to grow their profits by actually managing the medical care of sick people. The notion that they can do so is, of course, absurd. Furthermore, the notion that the Republicans would be relying on the insurers not only to make a profit, but also to reduce the cost of American healthcare at the same time, literally scares the bejeebers out of insurance executives. The very last thing Wellpoint and UnitedHealth Group want is for McCain to win the presidency, then turn to them and say, “OK boys, do your cost-reducing stuff!” A Republican victory would suddenly reveal the insurers to be entirely bankrupt of useful ideas, and would expose them to a sudden, ugly, stock-tanking demise.

Democrats, of course, will also bring about the demise of the private health insurance industry, just as Anonymous asserts. But at least they will have the grace to do it gradually and predictably - and with one last profit-inducing, stock-soaring windfall thrown in as a sweetener.

It was for these reasons that DrRich predicted last fall that the big insurers would have no choice but to root for and support the Democrats in 2008. (DrRich actually specified at that time that the insurers would support Ms. Clinton. He did not realize that she was then in the process of blowing the nomination by - among other things - forgetting to organize in the caucus states.)

Since DrRich initially posed his theory we have seen Warren Buffet (a major booster of Democratic candidates) placing a huge bet on the big health insurers - which undoubtedly means a) he strongly believes a Democrat will win the White House this fall, b) he understands what this victory will mean to the industry, and c) he reads this blog, which is the only place you can get political and economic theory like this.

We have also seen the major health insurers completely capitulate on their chief mission of providing affordable health insurance to the masses, thus announcing to the world that they no longer have the means, the will, or the intention of seriously trying to reduce the cost of healthcare. A clearer plea by the insurers to “Vote Democrat - Please!” could hardly be imagined (except, of course, for the fact that they are giving their financial support overwhelmingly, and for the very first time, to the Democrats).

DrRich admits that his theory originally was laced with a certain amount of sarcasm and irony, and was based at least partially on speculation, intuition, and confabulation. Nonetheless, developments since that time have provided us with hard facts that, while seemingly impossible to explain with more conventional thinking, are readily explained and even predicted by his theory.

Indeed, DrRich’s theory (and Warren Buffet’s investment strategy that is so obviously based upon it), look more infallible each and every day.

Posted in Healthcare economics, Investment "advice" | 2 Comments »

Proof That Warren Buffet Reads This Blog

May 17th, 2008 by DrRich

Yesterday, Jacob Goldstein of the Wall Street Journal Health Blog reported that Warren Buffet greatly increased his stake in big health insurers during the first quarter of 2008. Specifically, he added 300,000 shares of WellPoint and 400,000 shares of UnitedHealth to the holdings of Berkshire Hathaway. Notably, the stock prices of both of these insurers have been tanking for months. So why would Mr. Buffet be buying them?

Mr. Buffet has a simple answer: “If we’re going to be buying things, we want to buy them on sale.”

To which the WSJ replies: “Of course, if it was simply a matter of increasing holdings that are falling, we’d all be billionaires. There must be more to it than that.”

Indeed, there is more to it than that, and careful readers of this blog (as Mr. Buffet must surely be) realize what that is.

The case against buying health insurance stock, it goes without saying, is plain for anyone to see. As DrRich has pointed out more than once, the mega-insurance companies have traditionally had three major pathways for increasing shareholder value:

1) Acquiring and privatizing community assets - generally non-profit hospitals and non-profit insurers - for a tiny fraction of their true value (through the collusion and/or ignorance of boards of trustees, state attorneys general, and state insurance commissioners), then letting the market assign the actual value of those formerly public assets to the company’s stock price.

2) Mergers and acquisitions of smaller insurers, i.e., through the consolidation of the industry.

3) Taking advantage of certain opportunities for “efficiency” that big insurance companies’ quasi-monopolies have bought them, such as cherrypicking patients, handcuffing doctors, retrospectively denying coverage to insured individuals, and the manifold other activities we can safely bundle under the rubric, “covert rationing.”

Obviously, all three of these pathways are closing off. There are few community-owned assets left to acquire, and consolidation has already left the U.S. with just a handful of important health insurance carriers. As for the “efficiencies,” opportunities here are drying up as well. For instance, this past December, shareholders of UnitedHealth Group (concerned because subscribers to the company’s insurance products had decreased by 315,000 in 2007) demanded a promise from company executives that the insurer would become “nicer” to its subscribers. Their own shareholders are wrecking their business model!

Insurance companies are left with the impossible task of trying to make a profit (and worse, to demonstrate continued growth) by actually managing the healthcare of sick people. This has never been accomplished in the modern era, and in all likelihood is not within the realm of possibility.

This explains why the stock prices of the big health insurers have been heading south for some time now. But what explains Warren Buffet’s enthusiasm for these failing businesses?

Two things. First, he recognizes the growing prospect of a Democratic victory this fall, in both houses of Congress and the Presidency. Second, he has clearly read and digested DrRich’s posting of six months ago that describes what will happen to the insurance industry with a Democratic victory.

Republican-style healthcare reform, even with a Republican such as John McCain, would bring the rapid and painful death of the health insurance industry. This, simply, is because the Republican strategy for healthcare reform relies on “competition and efficiency” in the private insurance market to save the healthcare system. Republicans, apparently, have not noticed that the insurance companies have been desperately trying their brand of “efficiency” for more than a decade now, and it’s been a disaster. The insurers have shot their efficiency wad; they’re entirely bereft of ideas; they haven’t a clue. Indeed, one can only imagine how the notion of a Republican victory, and the unbearable expectations such a victory will place upon them, must shake insurance executives to their core.

On the surface, Democrats will also put the insurance industry in an untenable position, as it is clearly their aim to drive insurers out of business (though they won’t actually tell us so). But Democrats actually have no performance expectations whatsoever for the insurance industry. Their only expectation is that the insurance companies should fail in due time. This prospect - as long as it’s preceded by one last, massive windfall - is quite acceptable to an insurance industry itself, which, realistically, can only be looking for a graceful exit strategy at this point.

As it happens, that one last windfall for the insurance industry is an integral part of the Democrat’s promise. For, before they drive private insurers into oblivion, the Democrats will present them with the gift of government-paid insurance premiums for many (Obama) or all (Clinton) of the 47 million uninsured Americans. These new premiums will amount to as much as $150 billion per annum. So, for at least a while, the Democrats will guarantee that health insurance profits will rise, executives bonuses will increase, and - more to the point - their stock prices will soar.

Which brings us back to what Warren Buffet is up to. DrRich is a great admirer of Mr. Buffet, and is sincerely happy to have been of assistance in furthering his understanding of the complex interplay between politics and the fiscal status of the big health insurers. So far, Mr. Buffet is playing the game perfectly.

DrRich does respectfully remind him, however, to carefully monitor this blog for the “sell” signal.

__________

Addendum. DrRich has just noticed that his deeply admired fellow blogger, DB, has challenged him this morning to a discussion of honor over the topic of malpractice reform, where DrRich has taken a very contrarian and highly unpopular position. Indeed, even DrRich hates himself for making such an argument. Nonetheless, DrRich is compelled, reluctantly, to answer in the affirmative (this being a matter of honor), and will post a reply within a day or two.

Posted in General Rationing Issues | 6 Comments »

Primary Care: Time to Reboot

April 8th, 2008 by DrRich

American primary care medicine has entered into a period of change. “Change” is perhaps too mild a term; many - especially the primary care practitioners (PCPs) themselves - might call it a period of crisis. In any case it is change so profound that one might be forgiven for thinking Senator Obama is already president.

Consider. PCPs have been hogtied to a dysfunctional reimbursement system that (thanks to the government, the insurers, the AMA, and their own specialist colleagues) has drastically and systematically devalued their training, expertise, and time. The very concept of what a PCP is and does (and indeed, what they should be called - whether PCP, family doctor, general practitioner, gatekeeper, or medical homemaker) seems in constant flux.

Whatever it is PCPs do, the government, the insurance industry, and experts on medical policy have spent years making the primary care job seem, well, easy. Their practices have been reduced to a series of discrete, easily cookbookified tasks. Each of these tasks can be directed by “guidelines” (devised, of course, by non-PCP “experts”), compliance to which can be easily tabulated and monitored, thereby to determine the adequacy of the individual PCP’s performance. And, because their job is now so codified, they are expected to perform it accurately and reproducibly in a matter of minutes (some say 7.5 minutes per patient encounter, though others will allow up to 12.5), just like any other rote industrial process.

To make matters worse, PCPs are slowly awakening to the realization that they are being squeezed out from the bottom. Some of what they do (the really easy stuff) is being corporatized into mini-clinics by the large drug store chains, and the rest is being threatened by newly assertive nurse practitioners and doctor-nurses, who are at least tacitly supported by the insurance industry. (Thanks to Dr. Poses for pointing out the relationship between doctor-nurses and big insurance.)

No wonder PCPs have become so terminally frustrated.

It is natural for PCPs to want to fight the changes that are destroying their profession, and causing their numbers to dwindle. Many have offered ideas. Gain the public’s support by alerting them to the impending and dangerous shortage of PCPs. Improve PCP payment schedules. Forgive the student loans of young doctors who choose primary care. Lobby congress for pro-PCP legislation. Offer novenas.

Some of this (DrRich is thinking the novenas) might hold off the inevitable for a time. But PCPs are fighting more here than just the government, the insurers, their specialist colleagues, and nurses filled with thoughts of vengeance (for 150 years of having to give unquestioning obedience to arrogant, clueless and unfeeling doctors, if you care to ask them). The PCPs are fighting history.

What is happening to PCPs is what happens to many experts whose jobs are fundamentally based on knowledge and/or technology. That is, as knowledge and technology advance, some (and perhaps a lot) of what the experts do can be sufficiently simplified and “democratized” that less well-trained individuals become enabled (or believe they are enabled, which amounts to the same thing) to do it themselves.

This is what the market is telling PCPs has happened to them. A substantial part of what they do indeed has been reduced to guidelines and cookbooks (thanks to remarkable advances in clinical studies and medical technology). The typical patient (note: DrRich said “typical”) with hypertension, diabetes, cholesterol abnormalities, and common infections can be relied upon to respond reasonably well to reasonably standardized therapy. And the market is saying to the PCP: “We can find ways of doing this without you.”

The same thing has happened countless times in history. The 1500-year monopoly enjoyed by the clergy in interpreting the Word of God was completely disrupted by the printing press and by the upstarts who translated scripture into the vernacular. The music industry has been fundamentally disrupted by digital recording software, which enables anyone with a PC to do things that had always required multi-million dollar studios. Ditto for book publishing. Ditto for real estate agents, accountants, car dealers, teachers, newspapers. All are wrestling to one degree or another with the “creative destruction” that is produced by advancing knowledge and/or technology.

For the most part, of course, nobody (except, perhaps, the doctor-nurses) will come right out and tell the PCPs to go away altogether. Instead, they’re telling them to dumb down, to just follow the rules, to stick to the guidelines and be paid to perform (one thinks of trained seals), to become like the lesser-trained practitioners who inevitably will be replacing them over the next decade or so. That’s where the profession is going, they’re being told. Get with the program, adapt to reality - or don’t let the door hit you where you keep your wallet.

Looking at the situation from this more historical perspective, one can see why it seems futile for PCPs to respond by railing and complaining, by lobbying for the public and the legislatures to understand that they’re actually quite important, by appealing to their specialist colleagues for more than lip-service support, or by trying to convince more medical students to choose a disintegrating profession such as this.

PCPs are in the path of a tidal wave of disruption, triggered by economic realities and enabled by technology. They are unlikely to prevail by a’wishing, and a’hoping, and a’singing, and a’praying.

From the perspective of history, it becomes apparent that what PCPs need to do is reboot. They need to reinvent themselves in a way that is compatible with the new reality. So far, they seem to be seeing only the disruption part of the creative disruption now tearing their profession apart. They need to find the creative part.

From a simple examination of history, two possibilities will immediately come to mind.

1) Just as advancing medical knowledge and technology has made it possible for lesser-trained individuals to encroach on their turf, so have the same advances made it feasible for PCPs to encroach on the turf of their snugger (and smugger) colleagues - the specialists. Observing how some of the bread-and-butter skills of the PCP have been sufficiently reduced to the point that nurses can do it, one finds it inconceivable that similar basic skills now monopolized by specialists haven’t been similarly reduced. It is undeniably true that for a lot of what specialists do, one doesn’t actually need a specialist anymore to do it. (As a cardiologist, DrRich knows for a fact that this is the case, but unfortunately he is bound by blood-oaths extracted by the high priests of his guild - oaths which mortgaged the immortal souls of his progeny down through 10 generations - not to mention the specifics. Sorry.) But look around. You’ll find examples easily enough.

Fundamentally, advancing technology allows individuals to migrate upwards into areas formerly occupied only by more specialized individuals. This is a law of technologically progressive societies. That nurses are aggressively migrating upwards onto the turf of PCPs is merely a case in point. So, rather than fighting a doomed-by-history rear guard action against the advancing army of nurses, why should PCPs not instead launch a blessed-by-history invasion of their own, against the smugocracy (the people whose jobs end in -ologist)? Heck, they’ll even have the insurers and the feds on their side for once (for the same reason the doctor-nurses now do). Wouldn’t that be novel?

2)Another law of technologically progressive societies is that, whenever specialists are displaced by upwardly mobile, technology-enabled non-specialists, there will always be a portion of the customer base that is likewise displaced. That is, the new, less-sophisticated service providers will be able to provide useful services to a majority of customers - but not to all customers. The customers with high-end needs, who are left out under the new regime, present a new business opportunity.

PCPs operate in a world where the majority of their patients probably have relatively common, relatively easily cookbooked medical problems, and most of these patients will do just fine with their new doctor-nurses. But a substantial minority will have high-end needs, either in terms of complex medical problems that cannot be reduced to simple treatment pathways, or in terms of atypical medical problems that are not easily diagnosed.

DB has discussed at some length this “long tail” in the patient population, as defined by some aspect of material complexity in their medical conditions. The long tail simply cannot be served by guideline-directed care, whether administered by doctor-nurses, or by those more malleable (or complexity-averse) PCPs who will simply allow themselves to be absorbed by the new, dumbed-down primary care regime. Long-tail patients, the outliers, will not be small in number. They will comprise an important new business opportunity, “new” because it is a niche that is not recognized today, as it will be when these patients are being systematically (instead of randomly) culled out.

That business opportunity can be filled by many of today’s PCPs. These will be doctors who enjoy puzzling through complex diagnostic problems, and dealing with complex management issues, and have been trained to do so. To DrRich, this spells “internist.” Doctor-nurses can’t do this job. Specialists can’t do it either. This will be a specific niche for internists.

The best part is that the feds and the insurers, in selling us on the dumbed-down PCP model, are busily assuring us that there is no substantial need for sophisticated PCPs (hence, the appropriateness of doctor-nurses). And in proving the point they’ll be able to rely on carefully constructed, population-based outcome measures (which, since they speak to the average patient, will look very favorable) to marginalize the complaints of the outlying patients. Having refused to acknowledge the existence of complex patients, they’ll hardly be able to make special provisions for their care.

This leaves the door wide open for internists to establish practices to provide healthcare services to patients with difficult diagnostic or management problems, who are being neglected and mishandled by the “official” healthcare system. (These patients know who they are, and are desperately looking even today for somebody to help them.) And since to insurance companies and the feds these patients don’t exist, these practices will have the opportunity to operate outside the system, as private-pay practices, which will eliminate the demeaning checklists, the one-size-fits all guidelines, and the stifling time limits under which PCPs now must operate. And, like plumbers and electricians, they can get paid for what their time and expertise is worth.

(To those of you who immediately object to such a thing because asking patients to pay themselves for medical care is unethical, DrRich asserts it is indeed possible to do this entirely fairly and ethically, while allowing almost anyone who wants this kind of service to have it, and some day he will describe how. But for now, just celebrate the right of people to spend their own money on their own healthcare even when it’s provided by actual physicians, just as [DrRich suspects] you celebrate their right to spend money on chelationists, homeopaths, or reiki practitioners.)

The bottom line, as DrRich sees it, is that the identity crisis now being experienced by American PCPs, while certainly catalyzed by healthcare economics and politics, is a manifestation of the natural and inevitable disruption produced by advancing knowledge and technology. PCPs may be the first, but all physicians will soon face similar challenges as long as medicine continues to advance.

If the PCPs respond logically to this crisis - that is, instead of fighting it, recognizing the opportunities it presents - their specialist colleagues will soon experience their own “encroachment from below,” which is the hallmark of a mobile, technologically progressive society.

Posted in New business models for healthcare, Primary Care in America | 20 Comments »

Can a Voucher System Fix American Healthcare?

March 21st, 2008 by DrRich

A previous post considered the main problem with current healthcare financing as described by Drs. Fuchs and Emanuel, namely, that individuals are actually paying for their own healthcare today, but are led to believe that the cost is actually “shared” by businesses and government. Since they believe they are getting something for nothing, there is no incentive for Americans to limit their demands for healthcare.

It should be no surprise, therefore, that the solution proposed by Fuchs and Emanuel offers to make individual Americans aware of how much of their own money is being spent.

Under their plan, every American will be given vouchers by the government to purchase health insurance from private companies. The vouchers will be paid for from a Value Added Tax (VAT) on purchased goods. Insurance companies would be required to sell a basic insurance plan (fully covered by the vouchers) to any individual American, regardless of any underlying medical conditions.

Furthermore, individuals would not be limited to the insurance they receive under the voucher plan. Instead they would be free to purchase whatever additional healthcare coverage they choose.

The Fuchs/Emanuel plan is therefore universal, but also intends to preserve Americans’ freedom of choice. In DrRich’s estimation, it is the explicit nod to freedom of choice that makes this proposal interesting.

The “basic health services” that would be required under this plan (i.e., the services that insurance companies would have to provide to anybody with a voucher) would be determined by a federal health board, specifically modeled after the Federal Reserve Board.

Notably, Senator Tom Daschle has recently published a book that also recommends a federal health board modeled after the Federal Reserve Board. How much of this idea he may have received from Fuchs/Emanuel (who have been writing about this for a number of years) is not known to DrRich. But Daschle’s call for a federal health board has been endorsed - at least to the extent of supplying “blurbs” to spur book sales - by several disparate political figures including Senator Bob Dole and Senator Barack Obama. So, apparently, the “federal health board” may be an idea that is gaining in popularity. (It is perhaps unfortunate that both the Fuchs/Emanuel proposal and the Daschle proposal were advanced well before the current credit crisis made the Federal Reserve Board seem far less omniscient and sure-footed than in happier days, and perhaps less welcome as a role model than it might have been a few short months ago.)

In any case, the fact that a federal health board has been championed by a noted American progressive makes DrRich suspicious that the idea of such a board is not inextricably tied to the notion of individual autonomy, as it is under the Fuchs/Emanuel plan. In the Daschle plan, the federal health board is the centerpiece; it is the whole idea, and is the means by which a centralized authority will control American healthcare. In the Fuchs/Emanuel plan, the voucher-supported basic coverage supplemented by individually purchased insurance is the centerpiece; the federal health board is “merely” the mechanism that will define what we mean by “basic coverage.” At least, that’s how DrRich understands it. And understanding it this way, DrRich will formally reject the Dasche plan as simply another way of turning the American healthcare system over to the feds, (so there, Tom!) and will consider the Fuchs/Emanuel plan more closely.

Will a scheme based on the Fuchs/Emanuel universal voucher plan work?

Now, DrRich has advanced his own plan for fixing American healthcare, thus joining the not-so-exclusive ranks of Fuchs, Emanuel, Daschle, Clinton, Obama, (maybe McCain - DrRich is not really sure), and thousands of others. And it would be all too easy and all too unproductive to dive into a long tract comparing the particulars of these many plans (possibly designed to show why none of them would work as well as DrRich’s).

But in truth, DrRich does not pretend to really know what the “best” plan for solving our healthcare problems might look like, and does not wish to try to drag his readers through the mud in a vain attempt to find out.

There are, however, some basic principles that will need to be decided upon - whether implicitly or explicitly - in any plan that offers to fix American healthcare. These principles will determine not only what kind of healthcare system we are to have, but also what sort of society we will become.

So in evaluating the Fuchs/Emanuel voucher plan (which was DrRich’s original assignment), he will do so within the framework of three basic ideas that must be addressed in any system that proposes to fix American healthcare. These ideas are:

1) Should the healthcare system be universal?

2) Should the healthcare system be designed to enforce equality, or should it instead permit Americans to exercise their autonomy as individuals?

3) Where’s the rationing?

We will explore each of these three questions in subsequent posts.

Note: This is the second in a series of posts that discuss healthcare economics, and the three basic questions we will have to answer before we can devise a way to fix American healthcare. The third post in this series, “Should the Healthcare System Be Universal?” can be found here. The first post in this series can be found here.

Posted in Fixing American Healthcare, Healthcare economics, New business models for healthcare | 3 Comments »