One Aggravated Rant to Another

I was glacing through the headlines on CNBC today and I saw this headline: "Selective Amnesia on Deficit Spending." I have enjoyed a couple of the articles written by the author, Julie Roginsky, in the past and so I decided to read it. Unlike her other articles, which always have a little bit of an attack on Republicans in office, I found this article to just be one big rant against...well, I am not even sure. She does target Republicans, Bush, anti-healthcare reformers, and I think anyone who is against what the President is doing. I usually enjoy reading articles from those with opposing opinions, but only if they hold logical arguments.

So, here are some of the points of the article and my comments regarding those points.

"The reasons for the current shortfall are relatively straightforward. Over the eight year prior to Obama's inauguration, the United States amassed the largest budget deficits in modern history. Two wars, tax cuts which were never paid for and the largest economic crisis in almost a century all contributed to a $1.3 trillion deficit by the end of 2008. The deep recession, plunging tax receipts and measures undertaken to spur the recovery have led to even greater deficit projections since the Obama inauguration. Many of the same people decrying the current budget deficit are the same people who not only cheerled the annihilation of the Clinton budget surplus but also cared not at all about how to pay for two wars while providing budget busting tax cuts. House GOP Leader John boehner, who has apparently come down with a severe case of amnesia when it comes to fiscal responsibility, criticized the majority for spending money with 'reckless abandon', despite being one of the largest enablers of deficit spending during the Bush years."

Talk about selective amnesia. It's fantastic how easy it is to condone all of the spending and deficit growth for this current recession and condemn the efforts by the previous administration to get us out of the previous recession. Yes, there was a recession back in 2001 for those that forgot. As far as those tax cuts are concerned, how many of those opposed to all things Bush enjoyed those savings? Well if you didn't like that tax savings, guess what, you got the change you were looking for. In order to pay for the current recession (which if we are going to place blame then let's do it fairly and blame it on pretty much everyone who was overleveraged and in debt, not forgetting all those on both sides of the aisle who encouraged and allowed it, they couldn't afford: States, Companies, Individuals and those that packaged that debt and sold it), and get the deficit down to "acceptable" levels tax hikes are going to happen, which Roginsky does mention a bit later. Those tax hikes, by the way, are not just going to happen to the uber wealthy. They will be passed on to pretty much everyone. I am not saying that the spending that was inacted under the guise of getting us out of this recession is all bad, and I am not saying that the spending to get out of the previously forgotten recession was all good. I am just saying let's remember all the facts and take into account how everyone has benefited or not benefited.

"Boehner's party, which tried to privatize Social Security as recently as four years ago, has also become staunchly defensive of the status quo when it cmes to what it claims is protection of senior entitlements. But as any honest analysis of the long-term federal budget will show, the growth in health care entitlement spending - and Medicare specifically - is the largest budget buster there is. The same deficit hawks who oppose serious health care reform are simply just contributing to the deficits they claim are such a huge problem."

Wow, I am not even sure where to begin this thing is so full of odd statements and outright avoidance of the real issue. I guess we can take it one sentence at a time. First, privatizing Social Security was one option to help keep some form of income going to seniors. Just like there is a problem with Medicare now, Social Security can't last in its current form. It is another entitlement program that will have to eventually be reformed. Privatising it was an option being discussed which has support from people on both sides though was primarily a Republican proposal. Similar to how a public health care option is being discussed now. It is one option being discussed. Fortunately many economists have come out denouncing the idea as one that will not solve the real problem. What's this whole bit about honest analysis? Who is saying that health care costs are not the largest part of the budget deficit? I thought the whole argument form "Boehner's party" was that any reform should not increase the budget. Wasn't that also the President's request? Didn't he say on a few occasions that he would not sign a Bill that was shown to increase the deficit? What on earth is even the point of this sentence? In the final sentence is Roginsky saying that the current proposals are the only serious ones? And if so, isn't this sentence...well...I am not even sure what it is. She is accusing the "Boehner party" of opposing the "serious reform" (which has been shown to increase the deficit) because they didn't want the deficit to increase. Well, ok. I can't speak for others who are registered Republicans, but I am personally for reform. I want there to be change, not more of the same ideas and I really take issue with the media portraying every Republican as ignorantly opposed to reform.

I am now going to skip her next three paragraphs, not because it think they are well written or don't have plenty of comments, but because I really don't want this to be such a long post. I recommend you read her article if you are dying to see what she says in those sentences. So, on to her concluding paragraph.

"At some point in the not too distant future, some president will have to look Americans in the eye and tell them that massive tax increases are needed and benefits must be drastically cut or eradicated because politicians in 2009 failed to enact reform that would have gotten our fiscal house in order. At that point, the naysayers of today, if they are ideologically consistent, with be forced to vote for politically suicidal policies in order to get our deficit under control. More likely, most of them will continue playing politics, embrace the selective amnesia that Leader Boehner and his cohorts have come to exemplify so well, and cliam that unsustainable budget deficits are really not so unsusstainable after all."

Well ok, we'll break this one down one sentence at a time too. Couldn't agree more with the first sentence, but not solely for the reason stated at the end of the sentence. Eventually reform will have to be enacted. Honestly I can't stand the politicking that has gone on from both sides on this issue. Instead of having a debate regarding all possible solutions (There are so many ideas out there on how to fix this problem that come from people who represent all backgrounds), we are spending time accusing each other of hating our kids and old people. Roginsky epitomizes those on the left who say that if Republicans would just offer a solution too then they would debate it and then when they are given suggestions they reject every last one of them because they don't stick to what they want. Some of those on the Right are striclty sticking to opposing all things on the Left or Obama. I 100% agree that we need to quite the politicking. As for that last sentence, I totally don't understand the anger in this last sentence. We've already talked about the "selective amnesia" that seems to be going around amongst everyone in the media and politics. And again, who is saying that the current deficit is sustainable? Who is saying that no reform is necessary?

I really dislike these kinds of articles. It is exactly what a majority of the arguments on the White House's website under the reality check section do. They avoid the real issue by strictly attacking those that outright oppose all reform, then they conveniently avoid talking about the significant differences between what the President requested reform do and what the legislature has proposed. They insenuate that all reform ideas are good ones and anyone opposed to any of those ideas is opposed to all reform. That couldn't be further from the truth and it annoys me that accusations are flying about who is just playing politics when those very accusations are the lowest form of politicking in my mind.

And Another One

I know there have been a lot of posts lately about health care, but this topic in particular really impacts all of us, and whatever is put into place by our current legislature will be very difficult (read politically impossible) to rectify if it is messed up.

I think that way too few out there are able to clearly state the problems as I see them with Health Care. That is why when I read this great article (though perhaps a bit too long) I thought: "This guy has said it better than I have or could have."

Here is the article.

If you want the cliff notes version keep reading, but as with any cliff notes, you are missing the real story.

There are many problems with Health Care in America. Few if any of which are being addressed by the current "debate" on capital hill. In fact, the methods currently being discussed really perpetuate the problem. Health Care professionals are disconnected from their patients (they are forced to be in many respects). Health Care professionals in fact are more clients of the insurance companies than the patients are of the medical profession (Did you know that for every 2 doctors there is one insurance agent?). This lack of connection between doctors (again, despite the doctors and other professionals best efforts) and patients quality of care is way down. While I don't agree with him spouting this as if it were the norm and I especially don't think doctors concsiously think like Medicare is the client, I do know that plenty of people out there have similar experiences:

"What amazed me most during five weeks in the ICU with my dad was the survival of paper and pen for medical instructions and histories. In that time, Dad was twice taken for surgical procedures intended for other patients (fortunately interrupted both times by our intervention). My dry cleaner uses a more elaborate system to track shirts than this hospital used to track treatment.

Not every hospital relies on paper-based orders and charts, but most still do. Why has adoption of clinical information technology been so slow? Companies invest in IT to reduce their costs, reduce mistakes (itself a form of cost-saving), and improve customer service. Better information technology would have improved my father’s experience in the ICU—and possibly his chances of survival.

But my father was not the customer; Medicare was. And although Medicare has experimented with new reimbursement approaches to drive better results, no centralized reimbursement system can be supple enough to address the many variables affecting the patient experience. Certainly, Medicare wasn’t paying for the quality of service during my dad’s hospital stay. And it wasn’t really paying for the quality of his care, either; indeed, because my dad got sepsis in the hospital, and had to spend weeks there before his death, the hospital was able to charge a lot more for his care than if it had successfully treated his pneumonia and sent him home in days."

The way to get rid of this disconnect is bringing insurance back to what it should be; something to cover the costs of emergencies. He also points out something very interesting, the debate has changed the meaning of health care to be something synonymous with health insurance. Have you noticed how when individual members of the senate, etc. stand up to talk they talk about all those who don't have health care? What do you mean they don't have health care? The problem is they don't have insurance to cover the costs of their regular and emergency care. In what other area of our lives do we expect our insurance to cover the costs of routine things? Home insurance doesn't pay our electic bill and car insurance doesn't pay for gas.

The author also feels, and I personally just haven't done the research but find his arguments compelling, that hospitals are taking a huge chunk of the costs pie. This is part of his argument:

"Consider the oft-quoted “statistic” that emergency-room care is the most expensive form of treatment. Has anyone who believes this ever actually been to an emergency room? My sister is an emergency-medicine physician; unlike most other specialists, ER docs usually work on scheduled shifts and are paid fixed salaries that place them in the lower ranks of physician compensation. The doctors and other workers are hardly underemployed: typically, ERs are unbelievably crowded. They have access to the facilities and equipment of the entire hospital, but require very few dedicated resources of their own. They benefit from the group buying power of the entire institution. No expensive art decorates the walls, and the waiting rooms resemble train-station waiting areas. So what exactly makes an ER more expensive than other forms of treatment?

Perhaps it’s the accounting. Since charity care, which is often performed in the ER, is one justification for hospitals’ protected place in law and regulation, it’s in hospitals’ interest to shift costs from overhead and other parts of the hospital to the ER, so that the costs of charity care—the public service that hospitals are providing—will appear to be high. Hospitals certainly lose money on their ERs; after all, many of their customers pay nothing. But to argue that ERs are costly compared with other treatment options, hospitals need to claim expenses well beyond the marginal (or incremental) cost of serving ER patients.

In a recent IRS survey of almost 500 nonprofit hospitals, nearly 60 percent reported providing charity care equal to less than 5 percent of their total revenue, and about 20 percent reported providing less than 2 percent. Analyzing data from the American Hospital Directory, The Wall Street Journal found that the 50 largest nonprofit hospitals or hospital systems made a combined “net income” (that is, profit) of $4.27 billion in 2006, nearly eight times their profits five years earlier."

He then goes on to debate the validity of how much of the costs of health care is made up from the new technology. This is another area where I would disagree with him to an extent. I don't think technology, as some suggest, makes up the majority of the rise in costs. He argues that he buys other innovative and new technologies all the time and they don't rise in costs, they lower costs. This argument doesn't take into account the scarcity of the technology available. It come to supply and demand and honestly the supply isn't great and demand has risen and will continue to.

His summary of the problems:

"A wasteful insurance system; distorted incentives; a bias toward treatment; moral hazard; hidden costs and a lack of transparency; curbed competition; service to the wrong customer. These are the problems at the foundation of our health-care system, resulting in a slow rot and requiring more and more money just to keep the system from collapsing.

How would the health-care reform that’s now taking shape solve these core problems? The Obama administration and Congress are still working out the details, but it looks like this generation of “comprehensive” reform will not address the underlying issues, any more than previous efforts did. Instead it will put yet more patches on the walls of an edifice that is fundamentally unsound—and then build that edifice higher."

Then his solution is a radical one. He suggests that we all contribute, paying a fixed premium rate dependent on age, to a catastrophic insurance program. By catastrophic he refers to it costing more than $50,000 (I would tend to think that too high and I also believe he sets it that high based on current costs). The rest of our care would be paid for out of income and savings. He suggests that everyone be forced to contribute to an HSA account (I am not a big fan of the forced part but I highly recommend that everyone get an HSA if you can). That HSA account would pay for the care that is more than mundane and less than catastrophic. The mundane care would be paid for by you out of pocket.

It is a radical solution and radical solutions tend to have bad up front results, but this kind of solution does actually address what the problems are.