By Lambert Strether of Corrente.
The key point to remember in all discussions of ObamaCare is that neither it, nor indeed the entire private health insurance “industry,” should exist. They are rent-seeking parasites, economic tapeworms. One does not improve a tapeworm; one removes it.
To understand this simple point, all we need to do is look north to Canada, where we see a single payer system — they call it “Medicare” — delivering equal or better health outcomes at dramatically lower cost, without a health insurance industry, and without ObamaCare’s bizarre, mystifying, and above all unfair Rube Goldberg-esque complexity. In fact, if we’d passed HR 676 in 2009, we would have saved hundreds of billions of dollars by now (more than enough to cover everyone) and thousands of lives, though ObamaCare apologists don’t like to talk much about the excess deaths that ObamaCare’s achingly slow rollout caused and is still causing.
So, the squillions and the deaths are two opportunity costs of going the ObamaCare route. But there are three other opportunity costs, each of which comes from the process of entrenching ObamaCare into our political economy, and making it harder to replace with anything better. So there are, as it were, three hooks by which the tapeworm fastens itself to the body of its host, before it begins to feed (or extract its rent).
The first and most obvious opportunity cost of ObamaCare could — if ObamaCare entrenches itself — be “government health care” (if we define, as most Americans would, government-run health care as like Medicare here or in Canada, where the government is the single payer, and not like the UK’s National Health Service, where doctors are government employees).[1] Here’s an example of what I mean:
Navigator Program Director Joyce Case said attendees are learning the whole process is not as daunting as they expected.
“A lot of it is fear of the unknown,” Ms. Case said in a phone interview. “When we show them the (insurance) plans they go, ‘Oh, these are private insurance companies.’ They go, ‘Oh, I thought this was ObamaCare.’”
(The news story is a description of a very active and seemingly well-organized Navigator program in Volusia, FL, but as we’ve seen above, it’s worse than pointless to be active and well-organized in the service of a program that shouldn’t exist in the first place.) Let me concede that all we really have here is an anecdote, but then, even though Medicare for all consistently polls well, we don’t have a straight-up comparison of ObamaCare vs. single payer that shows how people understand the two concepts. However, the (paraphrased) quote is interesting: “Oh, I thought this was ObamaCare.” What that quote tells me, at least, is that people who didn’t follow the debate closely expected to get something from ObamaCare that was not private health insurance: That is, government health insurance. (YMMV; I’d be interested to hear more anecdotes, especially if there are any Navigators in the commentariat.) Interestingly, many of the people whom ObamaCare’s marketing efforts are ignoring are “vulnerable & unengaged” types, low information types who would therefore be expecting an actual government program instead of a ginormous rent-extracting monstrosity. Oh well.
I bring this up because one of the consistent claims ObamaCare apologists make is that single payer wasn’t “politically feasible” (and never mind favorable single payer polling, or the possibility of nuking the filibuster when it would have mattered, in 2009, instead of when it didn’t, in 2013). Leaving aside the bizarre idea that politics is about accepting what is feasible instead of changing it — “Some men see things as they are and say, why; I dream things that never were and say, why not” (RFK) — ‘Oh, I thought this was ObamaCare’ could show that indeed, there was already a ready-made constituency for a government health care program; that’s what they thought ObamaCare was! (Market state solutions are still relatively unfamiliar, I guess.)
And not leveraging that constituency is an opportunity cost: When people get insurance they become attached to it, which is why Obama lied to them and said they could keep it. So — assuming that ObamaCare does not go into death spiral mode, as, despite the pom pom waving, it still may do — people with new policies under it may be less inclined to seek an even better system, not more. And so, the tapeworm affixes itself to the body politic, the hook being the Democratic Party itself, with its unwillingness to present policy alternatives fairly. (“Only the tapeworm is politically feasible! You purist!”)
The second opportunity cost is the energy, time, and money devoted by Democratic-leaning non-profits and public service agencies, who were given walking around money to become insurance salesmen. Take the SEIU — please:
LOS ANGELES, May 15, 2013 /PRNewswire/ — SEIU United Long Term Care Workers’ Union (ULTCW) is proud to announce that it has been selected as a grant partner by Covered California and the recipient of a $1 million outreach and education grant. The partnership and funding will be used over an 8-month period beginning July 1, 2013, to bring increased awareness about new healthcare benefits and to educate Californians about the subsidy programs available to them under the Affordable Care Act.
“We are pleased to be one of the first recipients of Covered California’s outreach and education grants,” said Laphonza Butler, President of SEIU-ULTCW. “As long term care workers, we understand the importance of ensuring that Californians have the information they’ll need when making decisions about their healthcare options under the new healthcare law, and we are well positioned to reach the array of diverse communities in which we live and serve. We have a lot of education to do in a short time, but we’re ready.”
I’ll skip over the cringe-inducing, mushy jargon of the Democratic nomenklatura (“diverse communities,” “education”, “the information they’ll need when making decisions”), and I’ll also skip over the consumerist implications of “options”[2] (More on the SEIU; the SEIU in VT.) Here’s the question: If you’re going to give a Union a million bucks, isn’t the biggest bang for the buck going to be organizing? And if it’s not, then what good is the Union, anyhow? And so, the tapeworm affixes itself to the body politic, the hook being Union leadership, while they, and the grant writers, grant administrators, and program administrators suck happily from their tiny flow from ObamaCare’s giant stream of rental extraction.
The third opportunity cost is software engineering talent. (The opportunity cost here is similar to the opportunity cost imposed on society by the finance sector, which lures many bright minds for useless or destructive looting opportunities like CDOs or HFT.) From the Online WSJ:
ZocDoc’s Mr. Massoumi and other health-care entrepreneurs are betting that, given the power to pick their own plans, consumers will gravitate to the online services that are the easiest and most fun to use.
To help build the cool stuff, the startups have poached hundreds of engineers from other Silicon Valley companies and loaded up on investors to keep driving growth. ZocDoc has raised almost $100 million from Khosla Ventures and other venture firms; Audax took in $55 million over the past three years, mainly from Blue Cross Blue Shield of Florida and other insurers.
As we know, that $100 million of VC money is going to spent for a program that shouldn’t exist, and the hundreds of engineers are spending their energy and talents on a project that should never have begun, any more than healthcare.gov should have been built.
Some of those pitfalls might have been avoided with a simpler design, say founders of recent health-tech startups.
“Figuring out what insurance benefits are applicable to you is incredibly complicated,” says Rhett Woods, the head of experience design at Audax. Pointing to a computer monitor in the firm’s new San Francisco office, he clicks through pictograms that greet new users of Zensey, Audax’s healthcare portal, and take the place of tedious forms. The menus are designed for users with sixth-to-eighth-grade reading levels, Mr. Woods says.
Great. So, we spent a shit ton of money and a lot of scarce talent putting pictograms onto the moving parts of an “incredibly complicated” Rube Goldberg device that shouldn’t exist in the first place! Yeah, who knows, the next Susan Kare — she designed the lasso, the paint bucket, and other ubiquitous UI elements for the Mac — might be drawing useless pictograms to help sell junk insurance right now! And then… And then, The Next Susan Kare can move on, not to NeXT, but to another useless, parasitical pictogram project for another ObamaCare project, and then another, and then another, because the complexity is never ending, indeed, self-reproducing! She’s got a job for life! And so, the tapeworm affixes itself to the body politic, the hook being VCs and the software firms they fund, all of whom, just like the SEIU, suck a little bit from ObamaCare’s rental extraction flow.
Can’t quantify any of this, of course; but when ObamaCare apologists talk about how ObamaCare is going to become harder to repeal, I don’t think they mean that a grateful populace will get dramatically better access to health care; I think they mean that ObamaCare is going to develop constituencies based on a distribution of rents; and that many of those rents will flow to political class and “creative class” Democratic constituencies; people much like themselves. Not that there’s anything wrong with that. The opportunity costs, alas, will be dramatically better access to health care for everyone, besides immense waste of time and energy by well-meaning civil society groups of all kinds, as well as software engineers, project managers, architects, designers, etc. All of these people really do have better things to do….
NOTES
[1] Yes, single payer is “centrist,” globally.
[2] Health care is, Obama avers, the right of every citizen. In Canada, everybody’s got the same access as everybody else. Under ObamaCare,there’s all these different “options” to sort through, all with different levels of risk, many of them junk, and others scams. Which country implements health care as a right better? (And don’t tell me “Because freedom!”) It’s like they’re trying to sell you a whole supermarket shelf full of different brands of air. “Would you like Platinum brand air? Gold brand?” “No, I just want air! I need to breathe!”
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I squeak in agreement….
Lambert, thanks for simple quote about health care insurance.
“The key point to remember in all discussions of ObamaCare is that neither it, nor indeed the entire private health insurance “industry,” should exist. They are rent-seeking parasites, economic tapeworms. One does not improve a tapeworm; one removes it.” Lambert Strether
Read more at http://www.nakedcapitalism.com/2013/12/obamacare-and-its-opportunity-costs.html#kY5Z6s1v6MDo4Zzk.99
I’ll put this in the links section as well:
http://gawker.com/colin-powell-is-a-communist-1479817944
Not that I disagree with the sentiment, but the best thing for the world short of Powell rotting in prison is to ignore Powell. The man doesn’t warrant a second chance or a shot at redemption. It would be nice if he might hand over his pension and any money he might have made from his celebrity to the wounded soldiers who are begging for donations to receive care.
Could the possibility exist that they are moving to Medicare for all but they are using things like Obamacare to delay the move until they thoroughly privatize Medicare?
I enjoy the promotion of Medicare for All but Medicare is being destroyed. You get partial coverage and then are required to buy a private supplemental plan for coverage & prescriptions. Yes it is still better than everyone else. but it’s slowly being taken apart.
ACA was written by a hodge podge of authors and lobbyists with a few political considerations designed to appeal to the imaginary “independent swing voter” who is usually just a Republican who doesn’t want to say he hates minorities and wants more money without impacting money donations from industry to Democrats. There is no ulterior motive.
The Democrats really have no idea what is in this bill or they would be in a full blown meltdown because its going to effect their low info voters negatively on a grand scale. At least when the GOP passed Medicare Part D, they didn’t directly harm people except through the loss of opportunity costs and making the rich richer, but no one is directly harmed which is why the GOP has remained strong among Seniors. The GOP read the bill and understands the basic problems with ACA, remember they wrote it as a trojan horse to sound nice and get the Dems to adopt it in the spirit of bipartisanship.
I think much of the problem rests in the Democrats being more or less the celebrity party. They are devoted to the rich and only what is sexy. The 50 State strategy despite its success was jettisoned because it meant less focus on commercials, trends and messaging, the fun stuff and focused on asking people what they want and going door to door to ask people to support you. Its hard work, but it pays off. Its not fun.
GOP wrote the bill? I thought the Dems and their insurance company allies wrote the bill.
Separate the insurance lamprey from the health care lake trout.
ACA had its genesis as the right wing alternative to Hillary-care from ’93.
http://www.csmonitor.com/Business/Robert-Reich/2013/1028/The-irony-of-Republican-disapproval-of-Obamacare
The “good” parts of the bill were poll tested in the late 80’s and early 90’s with the goal of preventing people from demanding single-payer type reforms by masking the real problems with healthcare and healthcare delivery.
Yes, after the GOP was thoroughly rejected in two elections and relied on fear of brown ferners in ’02 and ’04, the Democrats decided to embrace Republican policies. Yes, ACA does have its genesis with the right wing.
ACA was simply not the best possible solution. The GOP and their ideas were rejected. The problem is the Democrats are largely fuzzy Republicans who want to be liked.
“Medicare is being destroyed. You get partial coverage and then are required to buy a private supplemental plan for coverage & prescriptions. Yes it is still better than everyone else. but it’s slowly being taken apart.”
+ 100.
I tried to say something like this in a comment yesterday, but you said it better.
And while everybody’s hysterical over Obamacare, nobody’s paying attention to the drip, drip, drip that is steadily diminishing and dismantling Medicare. Perhaps you are right, and that is actually the plan.
My experience with Medicare is limited to helping an elderly relative with it. But I think that it’s always provided “partial” coverage (80%); you could buy a supplemental policy for the balance.
Medicare paid 80% with a $150 annual deductible. Any doc, any hospital. Supplemental (BC/BC) was $223 / month, and paid the remaining 20%. So for $223 + 12.50 per month, she was 100% covered — no bills at all.
Medicare D was about $85/month — typically reduced the cost of medications by 80 – 95%. Bills went from $300 to $12.
Not trivializing the cost of $308 / month for many seniors (or younger individuals), but it covered hundreds of thousands in bills each year (at “rack rate”).
Medicare really is awesome — and if it was extended to all, the supplements would probably be a fraction of what they are today.
I agree about Medicare. Because my coverage is disability and not age related I’m ineligible for supplemental coverage. Everyone under 65 is ineligble. Most are on Medicaid as well. Fortunately my medical bills are low now.
Still, a premium of roughly $100/month and I get 80% coverage. I don’t know how your elderly relative only paid $12.50,but maybe that was her net cost in an Advantage plan, as mine is (my premium includes prescriptions, nets out to 0 or normal Medicare premium of $100). 80/20, or regular Medicare, would be a silver plan right? The Advantage plans have co-pays of $20 and $40 for primary docs and specialists instead, with no deductible, but they hit you on the first few days of being hospitalized (and hospitalizations rarely last more than a few days). I only take generics, which I get with no co-pay, except one generic they exempt for some concocted reason and costs me $260/yr, (and another medication I import from abroad, even the ‘legal’ generic would send me into the donut hole and cost me several thousand a year). I’m 56 and would be deemed uninsurable. In fact, at the behest of others, I applied for and was rejected for Long Term Care (not to say I told them so but…..), even with outrageous premiums of 50% of future, adjusted for inflation, benefits.
I think Medicare is a hell of a deal. If I could get supplemental coverage for $223/mo. I’d think I’d died and gone to heaven. I say this after having been covered by many large employer plans, considered very good. I concurred, never having had any issue with an insurer, until I found myself suddenly with lots of medical problems and making high claims. My “good” insurer didn’t look nearly so good. I was very fortunate to have both the time and knowledge (had worked arguing for hospital payment in past, and knew how to read an insurance policy and who to contact to advocate my case) to dispute the large pile of denied claims. Still, for two successive years, my $4500 out-of-pocket max ballooned into a $20K reality. For example, ‘customary and reasonable fee’ for my neurosurgeon was $1350. I defied them to find a NS who would operate for that. The insurer did double their reimbursement rate (and my doc, a friend of mine and the family, wrote off the rest of his $7500 fee. I found most were not so generous.).
Medicare may have some legitimate cost control measures in place but they don’t deny claims on the basis of the effect on their balance sheet. Medicare for all? I’m all in.
BTW, if you read this Lambert, Sanders and Leahy introduced a bill in May to move the waivers up to Jan ’15 (e.g. single payer in VT) and a corresponding bill was introduced at the same time in the House. They’re both in their little Committees now, awaiting action from our “do less than nothing” Congress.
Lucy, it’s stories like yours that make my blood boil. There is simply no way of knowing how “good” these policies are until you have to use them.
Obamacare will ultimately fail because it does not address the systemic problems of the actual health care system. We pay way too much for the health care we actually utilize. Failing to solve that problem merely means more people will now have access to an obscenely expensive health care system. Lots has been written about comparative health care costs between nations, but every article should start with the fact we are paying at least twice as much, if not more, for routine care/procedures. We would not stand for that in any other aspect of our lives, yet in one of the most important, our health, many just seem to shrug their shoulders so long as they perceive someone else is footing the bill (e.g., employer provided health care).
Bring our health costs in line with the rest of the world, do away with rent seeking insurance companies, outlaw deductibles/co-pays, and we could have an accessible/affordable health care system. I know, politically impossible, and a dream, unless you live in Canada or any other industrialized country.
What I find so utterly astounding is how small business owners, as a group, tend to be rather hostile towards the idea of a single payer system. Yet they carry more than their share of the burden from the ole status quo! HELLO. Go figure… – Aliceinwonderland
To the point as usual, but one minor quibble.
Software engineering talent is NOT in short supply – it is in excess. That’s why STEM salaries and employment opportunities are declining. Using something of which there is too much is not an opportunity cost.
It’s predictable that something which is cheap tends to be used wastefully, and something which is expensive more carefully. If we stopped flooding the STEM market with ever more foreign nationals, these web pages would be simpler – because they would have to be, because there would not be the excess talent to just throw at overly complex and poorly managed projects.
The issue here, Lambert, is that we’ve collectively lost our minds as a society. We have moved away using a three-stage rocket from American pragmatism to Americans living in outer-f___ing space. If a solution to a collective problem is reasonable then it automatically is disqualified. I knew from the beginning of the “debate” that the result would be a POS bill, i.e., within weeks. Why is that? Because I watched how the “debate” was being formed and knew (I had watched from pretty near the “inside” the whole Hilary-care debacle) exactly how it would end up. First, logic, pragmatism, science was thrown out of the debate, therefore no bill could possibly result that was not a back-room deal.
The failure did not come, as you note, from the right. The American people, had they been presented with the facts consistently by progressives would have come around to some version of single-payer or, at least, some version of a Continental system. This would have taken, in my estimate, two years rather than one year. Progressives in Congress should have dragged their feet and joined the Republicans in opposing the ACA to extend the debate. Eventually, facts, science and reason would have cleared the decks and serious thought would have gradually leaked even into the propaganda organs. Had this debate occurred rather than the phony and utterly staged one we saw it would have grounded the American people into returning to Earth from outer-space and perhaps addressed other problems realistically and pragmatically.
Now, frankly, it may be too late. Nothing in American politics makes any sense, at this point, other than the raw use of force by the power-elite. The only force that offered sensible alternatives to the status-quo is the left and the left has lost its way particularly after Obama was elected. The left seems capable of some cogent analysis but its action is limited to the shaking of fists and making fun (Comedy Central) of the right. What a sad situation we’re in!
‘We’ve lost our minds as a society’….’Nothing in American politics makes any sense’…..
Unfortunately these statements reflect my dismal view of the basics creating the goliath convoluted health care mess.
The public psyche has been so invaded with misinformation such as what constitutes a healthy diet which is a basis of health.
Why is corn (thus corn syrup) wheat and sugar subsidized instead of fruit and vegetables? Factory farms are environmentally devastating aberrations requiring massive use of antibiotics in livestock to counteract appalling unnatural conditions in addition to the primary use of corn and manufacturing waste as feed.
And we now have rampant antibiotic resistant MERSA, diabetes and other degenerative diseases not existing (in any degree) two generations ago.
With all the toxins allowed to flood our environment, charities like Susan Komen breast cancer should be on the front lines of reducing that instead of exclusive focus on treatment and a magic bullet. But that’s not where the big money is. Again, many of these cancers were largely unknown to our grandparents generation….
We as a country use and export massive amounts of weaponry, much of it with depleted uranium producing contamination for generations….
We as a society, as a political and economic system that subverts the most basic common sense principles for short term extraction has gone so far off the rails….
Why is corn (thus corn syrup) wheat and sugar subsidized instead of fruit and vegetables?
Well, for that matter, why should government subsidize anything?
Yes, instead we could practice ‘true cost economics’ where the pricing for polluting and disease producing products reflected the cost of societal damage instead of resources recklessly extracted leaving behind enormous societal costs. We could save trillions in damages and it would not be expensive to eat healthy as opposed to cheap disease producing crap.
In this discussion, it is insane to essentially turn over the American diet to big agribusiness/fast food/factory farms by subsidizing the obesity, diabetic, degenerative disease -creating elements of the American diet and then in response to the burgeoning costs of health crisis, incorporate the profiteers into the ‘solution’. (I understand the TPP currently being negotiated greatly benefits big pharma’s power and pricing also).
‘Free Choice’ desperately needs to be paired with fact based information. Instead it seems the population is just a marketing target on deep levels (Bernays, nephew to Carl Jung invented modern PR and changed ‘citizen’ to ‘consumer’) and society as a whole has lost it’s mind.
Bernays was the nephew of Freud. Please do not disparage the good name of Carl Jung.
Thank you, I stand corrected.
Avarice, corruption and cronyism have usurped our democracy. Unless we remove them, we are never going to get any common-sense solutions.
“not like the UK’s National Health Service, where doctors are government employees”: I’m open to correction but I understand that hospital doctors are employees but GPs are self-employed, usually in partnerships, or are employed by partnerships if they are not themselves partners.
Hi dearieme
It’s actually a tad more complicated than that, but Lambert is basically correct. Physicians are employed by the government either overtly or by “soft power”.
Notionally — and, in the eyes of the law — both hospital consultants (you’d call them “residents”) and GPs in Primary Care are either self-employed or partners in partnership practices in the community. In fact, under EU law preventing restrictions on exercising your right to practice your trade freely, it would be illegal for the government to force physicians to work for the government.
But the setting up of the NHS brought about a typically British fudge and compromise whereby hospital consultants and GPs had to work a set proportion of their time in the NHS. Once they’d done that (most consultants do three days per week in an NHS hospital seeing NHS patients) they are free to do (much more lucrative) private work for the insurance companies (as part of the insurer’s networks) or, as is becoming increasingly common, outside of the insurance companies rigmarole of rate cards and haggling over fees with a side order of late payments by only getting referrals from word-or-mouth recommendation.
In theory, the hospital consultant could do no NHS hours at all. But in practice, without an NHS “residency” no insurer will refer patients to them and pay-as-you-go patients wouldn’t trust them because they’d have too little patient throughput and no independent (NHS) stats on patient outcomes to judge them against. And as for Primary Care GPs, outside of London and a couple of other big cities, the only game in town is the NHS so all the GP’s partnership practices work entirely for the NHS with the odd extra earned for a smidge of private fee paying jobs (preparing reports on employee fitness for corporations or the companies which run corporation’s employee wellbeing (that’s an Orwellian-ism) departments trying to decide when an employee is malingering or simply being flogged to near-death in the workplace is the main source of such ad-hoc non-NHS work for the GPs).
Like I say, only the British (and possibly the Japanese) could come up with such a system and make it more-or-less work for almost 70 years. But that’s how it does function. As Aneurin “Nye” Bevan socialist (only here on NC can I use that word safely) who largely created the NHS said, “we stuffed their mouths with gold” by which he meant that he tied the previously private-sector clinicians into the NHS (and made them de-facto government employees) by making them an offer they couldn’t refuse. Personally, I don’t begrudge for one single second the salary of a physician. They by-and-large earn their money. And compared to a bank CEO or Hedge Fund manager, it’s a pittance.
Lambert didn’t spell all that lot out and it would have been too longwinded to do so, but like I say, the difference between UK physicians being government employees and not being government employees is too small to measure. That’s exactly what they are in practice.
Well, if there’s anything perfectly obvious from past experience, government provides better quality of service at lower cost. Medicine should be no different, with the VA as a sterling example of what all citizens will soon enjoy at the behest of an all-caring government.
What could possibly go wrong?
Maybe ACA/Obamacare will just crash when everything else resets in global-economic-crisis part-2.
Maybe it can have crib death sooner. Who knows?
As a public health MD, I can tell you that things have gotten tremendously more wasteful and expensive since the 1980s, even since the 1990s. It seems that we all strive to comply with the software now, and that providing patient care is secondary, and that a vast array of tech and non-tech middle managers has been inserted into the process. An “upstairs” has been built, which calls all the shots, cries “faster, faster”, “more PRODUCTIVITY”, “one problem per visit”! Meanwhile the software is slow, with a million boxes to click on multiple screens, using somebody else’s sentences to compose your extensive lie about what you checked, asked and taught in the 3.5 minutes of looking at the patient’s face. It’s worse when the software crashes. This was mandated on GWB’s watch. It’s all the same problem.
I am having trouble reading the blog because the type is too faint. This is a very serious problem for me.
LTR
Please help in making the type of the blog I so love clearer. This is a shocking and dismaying problem, because unless the type is clear I will not be able to read the posts.
You can increase the font size by hitting ctrl-+ on your keyboard (hit the control key and the ‘+’ key at the same time). Ctrl-0 will reset it to the default
The size is not the problem the clarity is the problem.
The point is to be able to read a blog easily, if that is no longer to be the case than I will sadly read this blog less if at all. Simplicity in reading a blog is essential, at least for me. As for the type, yeas it is both too faint and likely too small but the faintness is key. I am really disappointed, especially so by the lack of concern.
Please see this. It’s a rendering issue on your end:. You have font smoothing turned off on your PC.
This is the short form fix:
Go into your OS.
For Win 7-
System properties>
performance>
settings
Select “smooth edges of screen fonts”
Longer form if that does not resolve it:
http://www.computerhope.com/issues/ch000557.htm
While I doubt the website flub was intentional, it has served nicely as a Red Herring for the ACA. ” My, my, the webpage isn’t working the way we had intended. Not to worry, we’ve got our best and brightest working on the problem. See, problem solved… now sign up you proles!” Hence, miles of column inches have been devoted to the failures of the enrollment process – and damned near nothing said about the horrible inequities in the ACA.
“Opportunity Cost” is a concept of economic analysis. If you are going to use it, you must be prepared to go all the way. Analyzing “opportunity costs” requires assumptions about that which is being analyzed. In the case of Obamacare, the assumption is that the program is intended to make “healthcare” more available to more people at a lower cost.
But what is the “product” of an accessible, affordable “healthcare” system? People. Live, healthy people. People who need to eat, be sheltered, be educated, be kept occupied and out of “trouble.”
Context is important here. Can you truly say, with a straight face, that the policies of the US specifically and global elites in general over the last several decades are directed toward producing such a “product?”
In the US, we cut SNAP and unemployment. We outsource jobs. We focus relentlessly on the burdens of social security and medicare and stoke generational conflict. We tolerate increasing homelessness and food insecurity and even find a way to blame the victims for their own circumstances. We deify and enrich those in “technology” whose sole purpose it is to make greater numbers of humans unnecessary. Those who have a little more “wealth” to be stolen by the high command are nursed along until they are financially spent and then they, too, will be cut loose. Better not to let them know that just yet, so the clusterf**k known as Obamacare is manufactured.
This is the context in which the “opportunity costs” of Obamacare must be considered. If you think I am too cynical, think again. It is more reasonable to conclude that one man’s “opportunity cost” is another man’s OPPORTUNITY.
Ah, Lambert, we agree again!
Such a power opening to your piece. I think the only place I differ is that public health insurance should not exist either.
I hardly know what to say in regards to praise other than this is a great piece. You are on a roll.
“neither it, nor indeed the entire private health insurance “industry,” should exist”
I do personally agree that we should have national health insurance, like we should have national unemployment insurance, and I appreciate the ongoing rebuke of the Obots and ObamaCare apologists.
But I think the private health insurance industry is largely a scapegoat by the Democratic party trying to deflect attention from the fact that they’re the key enabler in the assault on Constitutional governance and economic justice.
The main problem within healthcare is that the entire system focuses on treatment (providing services) rather than prevention (healthy living). Public insurance programs like Medicaid and Medicare account for about half of all healthcare spending in the US, yet they haven’t been able to stop the massive explosion in costs at the hospital franchises, drug dealers, medical equipment pushers, and so forth. And beyond that, the focus on providing services has rendered a whole host of public policy issues that affect public health as being a separate issue from healthcare. That’s insane from any rational perspective attempting to solve the problem.
For example, some of the simplest ways to promote public health are to rebuild our passenger rail system, invest in wind and solar electricity generation, end the drug war, reduce our absurd intellectual property laws (particularly in biotechnology/pharmaceuticals), and tweak the Fair Labor Standards Act to give workers more compensation (thus reducing unhealthy stress and allowing more time for cooking, exercise, and rest).
But of course, doing that undermines the concentration of wealth and power, which the leaders of the Democratic party can’t allow to happen.
I think your comment re prevention has merit BUT the American health care system bias simply reflects what the practice of Western medicine consists of, although we have a more extreme version here due to a bad cultural mix of “can do” ism, which leads to an overtreatment bias (reinforced by patients being marketed to by Big Pharma, etc. to be “smart consumers” and ask for more treatment) and a pay for service medical system which incentivizes doctors to do more (with litigation risk as the ass cover). For instance, nearly all my doctors in Oz had a “wait and see” attitude before they’d prescribe (although they could be talked out of it) while the the US, doctors are strongly inclined to hand out meds fast. Ditto for other interventions.
And doctors here believe patients have no self discipline (and they may help create that via expectancy theory) so they again hand out meds (the search for an anti obesity pill!) rather than telling them to exercise and having lower paid staff help them figure out what they might do to become more active (getting out of the sedentary category alone produces the biggest incremental improvement in health outcomes). So we agree on that but 1. doctors make not much money doing that and 2. they on some level don’t believe in it (that the patients will do it) and separately don’t see that as their role.
What do you make of Karl Denninger’s take on Healthcare? To paraphrase, he has stated that most of the cost overrun is because the industry is exempt from antitrust laws?
For example, see his piece here: http://market-ticker.org/akcs-www?post=226641
Yves, thanks for the response. Agreed that there is a general bias in Western medicine toward more complex and technical approaches.
However, what strikes me as important is exploring why the US experience diverges so radically from our peers in Western civilization. That distinction shows there is much more going on unique to the US system beyond the general tendencies of Western medicine. To me, that leads back to public policy (the promotion of concentration of wealth and power), not private health insurance.
The government is the driving force in everything from intellectual property to working conditions to the market power of hospital chains (over both patients and employees).
Very well argued Lambert. Thank you for simply laying out the truthe.
I don’t understand why calling for universal, single payer healthcare is referred to as being “purist”. Actually, I do understand it from powerful people per this quote from Glenn Greenwald: “If you’re gonna challenge people in power, you have to be ready to be attacked in effective ways. That’s the nature of power. If they couldn’t do that to you, they wouldn’t be powerful. Yeah, but I mean, of course it’s not easy. Nobody likes it.” But I agree with Banger about our society as a whole. Asking for what makes sense, what would work and what would help is considered insane, by many ordinary people who support Obama. The ideology of the powerful has been taken up by people that ideology will harm. It scars me.
Actually, most people were for universal, single payer. That was taken off the table by Obama, who 1. told Congress they could not consider it and 2. had universal, single payer advocates arrested at the WH simply for trying to deliver their plan to him. So lack of a sane program simply cannot be laid at the feet of evil Republicans. This was a system wide denial of service by the powerful, regardless of official party affiliation.
It also entrenches itself by pitting very desperate people against each other. A few groups have gained much needed care. They have become advocates for this horrible state of affairs because they are desperate to have that care. Their life can depend on it. So, I see desperation as another way to feed the tapeworm.
“by many ordinary people who support Obama. ”
Many of these people are doing the best they can given their resources and abilities. What is being overlooked is their interaction with the Obots.
The Obots lies on a regular basis on blogs where they are challenged, and blog readership is self-selective. What are the Obots doing in their own neighborhoods where people don’t have the resources or knowledge to counter their “arguments”? Many of Obama’s supporters not the Obots genuinely believe ACA is Socialized medicine because the Obots compare it to other countries where they have socialized medicine and the Republicans call it that. All they hear is the quibble between Obots and Republicans, but as for losing their minds, I think its important to remember that the Democratic surge in popularity in 2006 was not directly related to the decline of GOP fortunes. The Democrats surged after Murtha made nominal opposition to the Iraq War the standing position. People will do the right thing if given the chance.
I tend to think the local Democratic illuminaries are tribal lunatics who enjoy the spectacle of politics which is why MSNBC is largely devoted to minor political quibbles and often misses policy implications even when George W. was in power.
I agree with you about obots being liars and I do understand not having time or resources to know what is actually happening. That is why I wish we had a functioning press.
The weird thing I’ve encountered is among highly educated, actual middle class to wealthy people who do have time/resources to do research. These are people who could know the facts, but choose not to. They are dedicated to the Democratic party and to Obama. I can only call this collusion with the powerful. Some of these people have enough money to be O.K., no matter what, but not all of them. (I would even say most of them will not be O.K.)
They are willing to throw away their own best interest and of course, the well being of others to keep the faith with their party. It feel political parties have taken the place of religion for many people in this society. Parties are now place people derive values, meaning and in some cases, even a god. I don’t know what you think about that, but it fits my own experience.
I would have said sports teams. I went into an Obama campaign office in ’08 before it was announced that Powell was going to endorse Obama. The staff had been told this would happen, and the organizer told me. She was excited. I was baffled. She seemed sort of aware of Powell’s issues, and I can’t quite her articulate her look of confusion. She couldn’t seem to grasp how Powell could be bad and endorsing the President, and then she fell into the mantra, “but a lot of people like him.”
Powell’s hideous nature didn’t seem to register when it came to endorsing her side.
This morning my local public radio station interviewed the spokesperson for CoverOregon. The Oracle web site is so broken that they switched to paper enrollment and moved the deadline up to Dec. 4. If you didn’t submit your paperwork by then you cannot get insurance on Jan.1. Now there is a Dec. 15 deadline for sending in paperwork to get insurance starting Feb. 1. Out of a target of 150,000 enrollees identified as eligible for subsidies, they have enrolled exactly 3500.
This is a total disaster that is getting little press. It’s clear a huge number of people who currently have insurance will have no coverage as of Jan1. Many were previously covered by Medicaid, others were in the private market and wanted to stay there. The director of CoverOregon (a private company funded by federal tax dollars) has gone on 3 month medical leave. Yet our governor announced today he is running for a 4th term. I really don’t see how this survives the tsunami of medical disaster stories coming in the first quarter of next year.
Ooh, “a private company funded by Federal tax dollars.” Sounds Flexian…
“It’s clear a huge number of people who currently have insurance will have no coverage as of Jan1.”
Remember all the hype about Y2K? Where’s the hype about this disaster in the making?
No one was responsible for Y2K except programmers 30 years prior. In the case of ACA, the Obots and elected Democrats own, let me repeat that again, OWN the American health industry and connected issues with it. They own it.
They doubled down on it in October. They have made this promise to low information voters that ACA would rock their worlds. If the Obots and the Democrats acknowledge a problem, they have to acknowledge their complicity in this mess for three years. There are no surprises in this legislation. Its been done for three years, but they have lied about this for three years. Look at the crap spewed by Obots on sites like this where they receive push back. What happens in discussion in the community among low info voters (which are most voters) who don’t have the resources and experience the readership here has? Those people will be angry. If they thought the town halls in recent years have been uncomfortable, wait until mothers are demanding to know why they can’t afford their treatments for their kids in town halls.
There are over 200 elected Democrats, so I’m sure they run the gamut from crooks who don’t care to the genuinely stupid. My guess is they are hoping to get through to the next election when they can run out the clock on Obama if they are even remotely intelligent. I suspect much of the Hillary chatter has more to do with a desire to forget the current President and the unfolding disaster of ACA than anything else.
The first Democrat to abandon ACA will become the target of every Democratic captured group and will be tossed on his ass by a primary challenge. Two, their name will be prominent and too prominent that many companies will have hesitation about hiring someone who might be too liberal.
The GOP doesn’t care because they can blame any problems on the Democrats. Bill Clinton didn’t have anything to do with Y2K. MBAs barely heard about computers until start ups became huge.
Unbelievable! I was going to get enrolled and I didn’t even know the deadline had been moved up. Yet, I’ve seen millions of dollars worth of CoverMeInBullShit commercials.
And no one from the state will answer my simple questions regarding the Medicaid asset recovery program. Eventually I figured out that if I cashed in my 401k I could boost my income enough to get the tax payers to give MODA , the largest private corporation in the state, $10,500 this year on my behalf and not a cent of it will be “recovered.”
Unbelievable. We’re trying to arrange for some care that’s been put off for years and this absurd system screws it up again.
Regarding opportunity cost, I don’t know why business in this country didn’t seize the opportunity to get out of providing healthcare insurance to workers. It doesn’t even seem WTO kosher to me. Other workers don’t have this cost tacked on, but we’re supposed to compete.
Kitzhaber and the rest have really failed to deliver on this long-held myth that Oregon was going to be a trail blazer in affordable care when it is neither.
Hmmm, Oregon has dropped asset recovery for Medicaid. No change in the law, and the federal law still permits any state to do it, but they have said they won’t enforce it. More passing to see what is in the long series of exemptions called Obamacare. What a useless, tragic circus it it.
“Regarding opportunity cost, I don’t know why business in this country didn’t seize the opportunity to get out of providing healthcare insurance to workers.”
But they have been getting out of it, and they will.
The capitalist/ corporatist/ ideological elite needed a private sector mandate before they dump their higher value middle class/ would-be middle class employees, otherwise the public outcry for government led reform and government based solution would have grown overwhelming.
ie., To be continued. I am positive that employer mandate is not going to last. It’s a “tax on business.”
Survival of the Fittest
Survival, fitting into an arbitrary box, is not the goal beyond the empire. The goal is to prosper.
The net present value of the empire depends upon its descendents. Your net present value depends upon your descendents. Of course the empire wants you to measure with its tools, money and property. Empire wants the dumbest population possible, to provide a stimulus that returns a bred-in response in a positive feedback loop, to grow itself.
To that end, legacy employs an explicit constitution, a contract corporation granting individual rights. The Bill of Rights itself is a bait and swap.
You individual rights do not come from government, despite the assumption embedded in the constitution. If you look at the control board regulations and their positive feedback outcomes, legacy capital assumes that it owns the air you breathe, the water you drink, and the land you farm. From any perspective, including democracy, individual rights stemming from property rights, with compliance income to complete the loop, is pretty damn stupid.
This planet is quite capable of taking care of itself. Humanity poses no threat; it’s just the latest tool, and humanity surpassed its diversity enabling equilibrium a long time ago, which is why it is getting dumber every day.
Those budget deficits measure human stupidity; the value of money is what you choose it to be. Empire is just another direct extension of the distillation gradient, providing you with vision, if you look. The DNA stack has seen this sh-show, and responded effectively, many times before.
The empire morons are printing to infinity and the empire population is decelerating. The empire is self-adjusting.
The Fed re-capitalized from the top down and cut off credit from the bottom up. That’s what all those laws, and all that computer code, is doing, determining bankruptcy preference by family line, resource misdirection. But the morons still have no idea what to do with that money, ‘thinking’ incorrectly that labor under pressure would solve the problem for them, which is why the middle class is imploding and taking capital with it.
Your open gate is never going to have a line in front of it. Don’t stand in line to compete for stupid.
Numbers are great, for regression and reduction, but they cannot create variables. Only you can do that. You cannot extrapolate the future from the past, except to replicate the past with ever greater efficiency.
The numbers tell you that you cannot cross the universe because it is expanding faster than you can travel. Where’s the false assumption?
The empire developers have re-routed water to their own end, the planet is responding, and they are not only not changing course, but are accelerating the stupidity with fracking, inflating land prices in the Bay Area to the delight of the San Francisco Fed, a tool of the international consortium of strategic stupidity, wow, big surprise.
A fever kills the self-replicating virus by accelerating it. Have you ever seen an addict oscillate on withdrawal?
Individuals have three basic stages – talent multiplication, works, and teaching. Most succumb to empire gravity by age two, and most of the rest by their teenage years, each joining a herd on a particular floor, a narrow bandwidth within which they will function until they die. You want to advance your timing depending upon your development, whether you are working in the machine room, on one of the floors, or applying the dress.
An economy has three basic steps; labor is entrepreneurial, capital is regressive, and middle class is the cash cow. History is a wave of wave forms, and most critters avoid change until they can’t.
Capital leverages labor to grow the middle class as a buffer against change, which depends upon labor participation. It adjusts the regulatory dam, ratcheting real estate prices with each artificial business cycle. Labor is obviously no longer interested in legacy capital replication, and is advancing its timing beyond the empire horizon accordingly.
Funny, how a buck gets harder and harder to find, but appears just when the empire least expects it. Build your own measuring instruments.
A carpenter doesn’t need a measuring tape to recognize plumb, line and square; an equipment operator doesn’t need a grade stick to recognize slope; an electrician doesn’t need a meter to recognize current; and you mat know when a storm is approaching by the pain in your lower back. Empires are for automatons that want to be told what to do, when to do it, and how to do it. Laws are measuring devices, which simply delimit the box under consideration, the empire not the universe.
Stand in line when you want to be measured, to measure the output gap, to adjust timing. The last middle class assumed a 40 hour workweek wasn’t possible, much less 24.
Empire is make-work folks. It’s just make-work. And you have much better things to do than react to an empire propaganda instrument like Silicon Valley, measuring itself, hoping that you will follow it into the real estate casino, to keep up with the Jones.
To say the Hillarycare Data Cloud was an overreach is a vast understatement. And Boehner is still on the wrong side of the saw.
The tree of knowledge is just a branch, the one that falls in the storm. Careful where you step, especially when that saddle rotates to drop the load. Only your own can throw you under the bus, you are who you hang out with, and sometimes you want to be thrown under the bus, depending upon where you want the apple to land.
If you want to break the back of empire, a ponzi, give unto Caesar that which is Caesar’s, and build your own. Knowledge is brittle, and so are empires; develop your instinct instead.
The proprietary development system is now so stupid that you can start from scratch, knowing nothing about computers, and build a better system faster than Microsoft can chase down its compounding economic activity errors. Boeing isn’t replicating itself with greater efficiency by accident. No one of any value showed up for the Dreamliner exercise because they were ruled out by the rules of engagement, the assumption of empire certification assumptions.
The coastlines are not suffering from oxygen deprivation by accident. Empires are sewers, which is why plumbers get paid better.
Mom and pop appear to be stupid, until they don’t, when their children are far ahead of the game. They’ve been to the meetings, written the job descriptions, and watched the sh-show from the mechanical raceway. Empires drown out individual lights, so the majority doesn’t recognize them until the empire light goes out.
If it’s all about monetary and fiscal policy, hire as many make-workers as you like, and work them as many hours as you want, to float the middle class bloat as far down stream as you like, to inflate capital as high as you want, and take the old empires with you, out into the desert again. Labor is always positioned long before capital or the middle class understands what is going on around them.
If you want to follow the derivatives of people who don’t care for themselves, by majority vote, that’s your business. Labor’s workweek is not subject to majority vote. What has the appearance of majority vote done for the Boeing machinists, or any other union in the last 50 years, other than paying it to be the monkey in a rigged cartel lottery generator?
You find yourself in adversity, “ready to give, willing to share….” Practice, beyond the horizon. Surviving in a sewer is not the goal. Learn to listen and listen to learn. Add I/O. The kernel is only rocket science if you make it so.
Kernels aren’t rocket science, but the apparent simplicity belies a whole lot of discipline and careful forethought. Trying to live-code one would be a dangerous stunt, let alone trying without knowing the present code base intimately.
:)
RE: “all we need to do is look north to Canada”.
They had their plutocrats and swindlers years ago trying to destroy the system even before it got started, but it was done province by province and eventually in all provinces in the same way; since the provinces are actually independent parts of the same confederation (not just different colored tabs in a carefully contrived “federal” notebook), that was possible, and the system was immensely popular and has thrived since.
Here meanwhile, Dogpatch-DC and its collection of commisars and corrupt butt-kissers called all the shots, with the results shown in the current mess.
There is some hope since Vermont is the only state that can implement its own “everybody in, nobody out” universal system. If it works well, which it proabably will, Dogpatch-DC and their plutocrat commissars will try everything and anything to destroy it!
Vermont cannot implement its universal system until 2017, and then only with a waiver from the federal government. Which they’ll get only if you think thieves are in the habit of letting their victims opt out of the theft.
Personally, I see no hope for real health care in the United States, but the destruction of Obamacare would in theory open the door for alternatives and bring down at least one aspect of our advancing corporate serfdorm. Luckily the system is surprisingly vulnerable and you can do your part by not signing up.
I refuse to sign up, long as those greedy, thieving insurance hacks stand between us and our healthcare! Once healthcare becomes non-profit again, they can count me in. – Aliceinwonderland
So, we know that a huge proportion of people of the people who are “successfully” signing on for Obamacare, are signing on for Medicaid. There is the economic problem with this, of course; the system as proposed needs paying customers, too. And there is the problem with the .gov website actually transferring their “completed” apps to their home states: .gov can’t do it and they don’t plan as of yet to tell the applicants that it isn’t being done. We’ll leave those problems aside.
What I find most distressing is how bad this Medicaid coverage is going to be. In many states, the vast majority of people on Medicaid are presently kids. These kids just cannot get to see specialists. Sure, they can see a GP; no problem. But specialists are not available to them; the waits can be many, many, many months. I can cite articles, but NK readers probably know this. Well, it’s a big problem, but at least with kids, there are charitable organizations, and anyway kids who need specialists are not nearly so common as adults who do.
Well, now that many more adults will be on Medicaid, MANY more people will lack specialists. It will be a HUGE issue; sick adults often need specialists. One might say, “well, at least they have basic health care;” that’s something. Well, kind of. In my own personal experience (I’m 50), I have never had a useful appointment with a GP. I have always been able to self-diagnose, and when I have gone to GPs they have almost always gotten stuff wrong. Specialists actually know something. It’s been like that with our dogs: the regular vet will not know much we don’t, but the specialists have been life-saving.
So here’s an example: My dad belongs to a social club of guys in their 50s-80s; big range of social classes; they meet once a week. Last week one guy in his 70s came in: his 41 y.o. sone had woken up the week before with bleeding from his rectum. I won’t fib and say I *know* the guy is on Medicaid, but absolutely everything re the conversation pointed to that. So, he was able to see a GP pretty fast. GP said he didn’t know what it was, but that the guy should absolutely see a gastroenterologist. Well, the soonest that he can get a slot, is in March. No, there is no shortage of gastroenterologists in the area; they just don’t take Medicaid patients, except in tiny numbers. A three month wait for mystery bleeding from the rectum. Fortunately a retired doctor in the club called around and found a gastroenterologist who will take a reasonable cash fee which this guy’s elderly dad will pay. Again, I can’t prove that this is Medicaid, though I’m sure it is. And the wait matches what I I read about how access to specialists in Medicaid works.
This will be horrible. People presently die due to lack of medical care – absolutely. But they hardly ever die due to lack of GP care: they die due to lack of specialists! And there is no arrangement to increase their number in any sort of way that would matter.
BTW, this retired doctor in the club has also recently been cashing out all his social and professional chips, by getting *Medicare* doctors for retired acquaintances. It is basically impossible to find a doctor in eastern CT who takes Medicare – no matter if you are upper middle class and buy a great supplemental policy. This is a regional problem in the U.S., but it is a BIG regional problem.
Some Obots are very, very, very sheltered. We have a close friend who is 72; he majored with perfect grades in a hard science from a top university; he’s often quoted (he’s first in his specialized scientific field) in the NYT. I found out a few days ago that he didn’t know the difference between a co-pay and a deductible. He thought it was two words for basically the same thing, and that that thing would never be really expensive, maybe $150 max. Yes, he is very well off. No, he has never had a deductible. Yes, he voted for Obama twice. Bet he would again.
“Sheltered.” Or, as some of us might say, “privileged.”
Reading all these comments as well as the article I learn that a simple problem has been turned into a monster by people who either did not understand the problem , intended to make a mess or were crooks.
If many other countries have solved this problem, well or adequately we should be able to replicate the good parts here.
Indeed the insurance companies may suffer but if the problem is severe enough that is part of the price.
Let us do something that works even if such as the baggers and their lib counterparts do not agree.
I would argue the vast majority of people don’t understand Obamacare.
Did people not see Jon Stewart (I think) and other comedians doing their parody poll of folks on street on their preference for “Obamacare” vs. the “Affordable Care Act” not that long ago. People polled as MUCH preferring the ACA, describing Obamacare as “awful” and the ACA as much better.
Not that it much matters what the people like or want, as we saw with this year’s failed gun legislation. What’s important is what our lawmakers will do (as dictated by special interests). But it’s reassuring to know, Lambert, that you are focused on what’s possible vs. what’s politically feasible. We need optimists. Sanders introduced a “Medicare for All” bill in the Senate today so there’s an opportunity for you. (not /s, if unclear)
The filibuster change this year doesn’t apply to legislation, only Presidential appointments. Any healthcare legislation still needs 60 votes (and to make it through the House).
“The filibuster change this year doesn’t apply to legislation, only Presidential appointments. Any healthcare legislation still needs 60 votes (and to make it through the House).”
Uh, perhaps you need to read up on the filibuster. The Supreme Court ruled in 1892 that the only Constitutional requirement was half the Senate body (possibly seated body) and the vote of the Vice President. The filibuster is merely an organizing rule which has no authority above the constitutional requirement.
Search engines are your friend. Always remember, 3rd grade social studies were not always completely correct. The Democratic excuse will be the “filibuster,” but the nuclear option is ignoring a Jim Crow era alliance between Southern and National Democrats to keep the Senate from devolving into three parties.
In his post Mac acknowledges, regarding our crisis with healthcare, that the insurance companies “may suffer” from us resolving the crisis. Let’s not forget one very simple fact: that health insurers are parasites, that they contribute nothing of value to healthcare, that their only function is creating a barrier to care so that they can extort money out of us. They are solely responsible for a predatory system that bankrupts and kills. Until we erase them from our healthcare system altogether, we will continue being victimized and abused over something we all need sooner or later, that is a basic human right. I don’t know about the rest of you, but frankly, living one major illness or injury away from bankruptcy and destitution puts a strain on my mental health. – Aliceinwonderland