A different view of the healthcare debate… The poll… What I’m reading

In his great book “Civilization: The West and the Rest,” historian Niall Ferguson identifies what he calls 6 killer apps that made western civilization the preeminent system of government and economics.  Number four on the list is Medicine.  The seeds of modern medical science, sown in 19^thCentury Europe, led to a “major improvement in health and life expectancy.”  Now as then, we need a healthy population to ensure a stable society and a productive economy.  Given our federal fiscal disaster, the future of the US depends in large part on how much healthcare we want and how we pay for it.  

Despite my libertarian leanings, I love Medicare.  And I worry that it will go broke before I draw my last breath.  We are already in the midst of a fiscal crisis about which neither political party seems to care.  Many economists predict another Great Depression unless we tend to it. So, there are a few principles that should guide us in developing a system that extends high quality healthcare to all and does so cost effectively.

First, the government should provide a social safety net.  Many Republicans forget it was conservative economist Friedrich Hayek who coined the term “safety net.”  In his master work “The Road to Serfdom,” he wrote: “There is no reason why in a society which has reached the general level of wealth which ours has attained the first kind of security should not be guaranteed to all… Nor is there any reason why the state should not assist… in providing for… common hazards of life against which… few individuals can make adequate provision… The case for the state’s helping to organize a comprehensive system of social insurance is very strong.”  That’s why the expansion of Medicaid was the most important element of the Affordable Care Act (ACA).  Making it available to middle-class families enabled them to make an informed choice about purchasing private insurance or sticking with a government program.  

Second, any new system must address the underlying cost structure.  The highly regulated, high cost Fee-for-Service system we have today must be overhauled.  The ACA proposed Accountable Care Organizations that would be compensated on the basis of medical outcomes.  Absent a mandate, the experiment unfortunately fizzled out.  

Those who favor Medicare for All (M4A) don’t seem to care about cost.  Their proposal would pay for additional coverage with a tax on the wealthy. The US has the most progressive tax code in the industrialized world.  The top 20% pay over 88% of income taxes. In Europe, a large part of government’s budget is covered by a Value Added Tax (VAT), usually adding about 20% or more to the price of goods purchased.  Would our so-called progressive politicians propose a regressive tax like the VAT to pay for M4A?  I’d like to see them try. 

Third, there must be room for competitive enterprises in the system.  Capitalist enterprises have innovated new treatment protocols, extraordinary medical devices and amazing pharmaceuticals.  Were it not for competition, we wouldn’t have laparoscopy, implanted defibrillators or ACE inhibitors.  Scandinavian countries providing free healthcare have no significant pharmaceutical or medical device industries.  They keep costs low by negotiating lower drug prices, for example, but rely on innovations from other countries. 

And, lastly, everyone should have some skin in the game.  I recently pointed to Singapore’s system as an example where consumers spend their own money first in buying healthcare services. Providers respond to competitive pressure from consumers to keep prices low. 

How would an alternative system look?  We can’t be sure.  There are too many entrenched interests making too much money for politicians to mount the courage to overthrow the current paradigm.  I would point to one example to give you an idea how a creative approach could improve outcomes. In France, the hospital comes to you.  Mobil advanced life support units, staffed by doctors and nurses, back up first responders. The result is better medical outcomes because people promptly get advanced treatment at home and lower cost because fewer patients go to the hospital.  Could you see that happening here?

I’m sure you’re waiting for me to tell you how we should design this new system.  But, I can’t!  I am not sure anyone can.  However, I believe that starting with a set of sound principles will lead to a better system than either M4A or the ACA.

WHO WILL LEAD?

The Poll

Recently I created a poll asking if you preferred longer essays like this one or the short takes I’ve been publishing since the beginning of the year.  Thank you to those of you who responded.  Unfortunately, you are deadlocked 50/50.  The poll is still open; so, if you haven’t voted, please do so by clicking HERE.  Thanks.

What I’m Reading

Sarah Lawrence College professor Samuel J. Abrams tells us the American Dream is alive and well in the 21^stCentury in his essay in the New York Times…  The Green New Deal proposed by Democrats will hurt working-class Americans most according to Brandon Weichert… Just finished a great book by Chris Voss, who developed the FBI’s hostage negotiating techniques.  It’s called “Never Split the Difference.”  Don’t think it’s only for business people negotiating deals. It’s a prescription for dealing with important people in your life too. 

Rules? What Rules?

"My, we seem to be a little short on brotherly love round here." 

-- Butch Cassidy, as played by Paul Newman in Butch Cassidy and the Sundance Kid

I got into a Facebook Fight last week. Have you ever been in one? It's kind of like that scene from Butch Cassidy and the Sundance Kid. You know the one where Butch has to get into a knife fight with a really big, scary guy. He asks him, "What are the rules?" Big Scary Guy replies: "Rules? In a knife fight? No rules!"  He no sooner gets the words out of his mouth than Butch kicks him in the groin. Well, there are no rules in a Facebook Fight either.

I use different internet tools for different purposes. LinkedIn for business; Facebook for personal stuff, pictures and messages to friends and family, etc. So, when I woke up at my usual 5 AM to a posting on my Facebook wall supporting the Wisconsin 14, I went off the deep end. Last year, I had de-friended members of my own family for posting their support of the Arizona immigration law. So, why am I waking up to some commie crap on my damn wall? By a so-called friend no less.

Now, 5 AM is not my best time of day. I could have deleted it. I could have blocked the friend from posting on my wall. I could have de-friended him. But, no-o-o-o! I responded aggressively.

My opponent was a very well read Ph.D. And worse, he was abetted by an old high school chum of mine with whom I haven’t spoken since graduation day. In fact, I am not sure I even spoke to him then. Two against one. That’s not fair! Oh yeah, there are no rules in a Facebook Fight. My H.S. buddy is a school psychologist according to his Facebook page. So, he is right there with the Ph.D.

Ph.D. hits me with Robert Reich. I parry with Freidrich Hayek. He’s never heard of him. Hah! Take that, Ph.D.

I am a fan of NY Times columnist, David Brooks. I never miss a column. He mostly writes about political and policy issues and represents a moderate voice that does not adhere to any political dogma. I guess that’s why I like him. His new book is called The Social Animal. I understand from the reviews and summaries that it is a fictional representation of the ways in which we form relationships and connect ourselves to ideas and social norms. Though not an expert on brain science, Brooks has written of our new understanding of it and how it has affected us. Think of all those bright business school grads on Wall Street and how they self destructed during the financial crisis of 2008/09.

So, here I am parrying the thrusts and jabs of my formidable opposition and it occurs to me that Brooks is right about all this. I am fairly well read myself and yet could not convince either of these guys of the wisdom of my thinking any more than they could convince me of theirs. It’s not that their thinking was irrational. Indeed, their thoughts might be considered to be a rationalization of their beliefs.

All their reading and learning had been directed to support their values and biases. So, were mine. There was no winning this Facebook Fight for any of us. No way, no how.

Isn’t that what’s happening across the nation? Don’t you get emails from your friends and colleagues that either reinforce your views or infuriate you? So, how can we solve the big national problems when we are all so enamored of what’s going on in our own heads that we can’t compromise?

A recent speech by Republican Governor Mitch Daniels of Indiana to the Conservative Political Action Committee provides some insight on how we might answer that question. He counsels his right wing followers to put everything on the table including tax increases and defense spending to resolve the problem of our deficits and debt.

He reminds his followers that “big change requires big majorities” and that we will “need people who never listen to Rush or Glenn or Laura or Sean”. He also reminds us that the founders “made compacts and concessions and, yes, compromises” in the cause of creating one union from the 13 colonies who won their freedom from the British crown.

NPR called it a Grown Up brand of GOP politics. We need that from both sides of the aisle. A recent report from economist John Mauldin found that a “majority of voters incorrectly believes the federal government spends more on defense/foreign aid than it does on Medicare and Social Security (63%). Also, a similar majority (60%) incorrectly believes problems with the federal budget can be fixed by just eliminating waste, fraud and abuse.”

The President created his own version of Grown Up politics with the Simpson Bowles Commission aimed at resolving our national debt. Their controversial proposal is dying a slow death like those of most Presidential commissions.

Our debt problem is serious and addressing it will be painful. What is called for is the equivalent of Ronald Reagan’s dollar bill speech in 1981. He held up a dollar bill and opened with “This is a dollar bill…..”

We guffawed about it the following day on the trading floor at Goldman Sachs. But, that’s the kind of communication that is called for now. Reagan explained to voters how every dollar they earn is divided up. The equivalent of a PowerPoint pie chart.

The pie chart needs to be updated. If nothing changes, every dollar of tax revenue will go to paying interest on the national debt within 10 years. Nothing left for national defense. Nothing left for social programs. Nothing.

The only question is: WHO WILL LEAD?