Antibiotics are losing their effectiveness

The problem with getting better at overcoming a problem is that often times the problem evolves and adapts. This has been the case with antibiotic usage. 

Although antibiotics are literally lifesavers, assisting our immune systems  to defeat some very nasty infections, many infections (fungi and bacteria) have evolved to resist and become immune to the antibiotics and antifungals. They've done this very quickly as humans count time but perhaps not as bacteria and fungi count time. 

One reason for this problem is that people across the world (this problem is evidently most acute in South Asia) have overused antibiotics and antifungals in a wide variety of circumstances. So we're seeing more of these organisms shrug off our best attempts at killing them. It's as if prisoners started developing immunity to small arms fire. Such a thing would be an unwelcome surprise to prison guards tasked to stop breakouts.

Check out the fascinating nine minute video below which explains the dire situation we're in and how worse may be yet to come. As pointed out in the video some other reasons that this situation exists include the requirements of globalized capital and an unnatural food supply chain. There is nothing supernatural here but this is nonetheless a very real horror show.

Democratic Debates

I haven't been all that impressed with any of the Democratic presidential contenders so far. Some were better spoken than others. Some like former vice-President Joe Biden seemed to have no clue why they were there. Senator Gillibrand's voice grates.

I liked Tulsi Gabbard's anti-war stances.Senator Harris was cynical and smart enough to attack Biden on his anti-busing position before later admitting that her present day stance wasn't all that different from Biden's. It's really early though.
In fact it's so early that it seems silly even to be talking about debates. As we saw in 2016 anything can happen. Just as I am finishing this post it looks like another candidate is already dropping out. Lightweight.

But there were a few things that came out of the recent first debates that I thought were worth people's notice. The Democrats as a whole seemed to be for decriminalizing illegal entry to the US and providing taxpayer paid health care for illegal immigrants. A few were also in support of eliminating private health care insurance in favor of a Medicare for All system. This will require higher taxes and not just on the rich, however that class is defined. 

I could be wrong but I do not think that there are tons of American voters who want to sacrifice their private health care coverage, enter an underpaid and understaffed public system, have the same coverage as someone who is not even supposed to be in this country, AND pay higher taxes on top of it all.

Detroit Public Schools: Don't Drink The Water!!!

If you think that certain people are by nature inferior then stories like this won't bother you all that much. But for the rest of us the truth is that no one in the United States should be exposed to contaminated water. Not only does unsafe water impact your health and life but it will also impact your future educational potential. Depending on how far back this problem has been occurring there could be multiple cohorts of Detroit public school students, mostly but not exclusively Black, who may have been impacted.

Functionally, American inner cities serve the same purpose as Native American reservations or the Gaza Strip. They are places where infrastructure and law are allowed to crumble to the detriment of the people living there. You don't have to engage in conspiracy theories. All you have to do is open your eyes and ask questions as to why these schools were allowed to reach these conditions. And why do we keep reading about these sorts of problems in certain communities. All else equal, which it certainly isn't, but were it so, children who consume or are exposed to heavy metals will on average be less able to perform cognitively in later years. They will have poorer grades and test scores. And they won't be as likely to get into college, which is often a prerequisite for a any chance at a middle class lifestyle. Fixing these problems may not be as exciting as other hot button cultural or social battles. But I think they're more important.

Drinking water will be turned off in all schools at Detroit Public Schools Community District after initial results for 16 schools showed higher than acceptable levels for copper and/or lead at one or more water sources. "I immediately turned off the drinking water at those schools and provided water bottles until water coolers arrive," DPSCD superintendent Nikolai Vitti said in a statement. Water at the 16 affected schools was shut off Tuesday. Shutoffs at the remaining schools will occur this week, Vitti said. 

Patient Dumping in Baltimore

"This place is cruel; no where could be much colder /If we don't change the world will soon be over"
Stevie Wonder "Living For The City"

There are things you are allowed to do and things you are not allowed to do. When no one is looking, for many people it's tempting to do the things they aren't allowed to do, particularly if it saves them money. For an auto company engineer this could mean ignoring a defective transmission part and letting a poor design go to market. Why should she jeopardize her bonus and next promotion for something that may not even be discovered for another decade? She can reason that those drivers could have had fatal accidents anyway. Maybe a banker sells a young couple a horrible mortgage with sub-prime interest rates and balloon payments, reasoning that as long as they sign on the dotted line it's not his responsibility to save them from themselves. A restaurant owner might choose to use the moldy jalapenos in the rear of the freezer or fry up the wormy meat that fell on the floor. Margins are tight and state investigators will never know. 

Or maybe a hospital, already dealing with lower reimbursements and higher costs than it can handle, decides to eject the patients who either lack insurance or lack more remunerative private insurance. This is called patient dumping. A psychotherapist good Samaritan named Imamu Baraka, apparently by happenstance, witnessed a woman being dumped outside near the bus stop on a cold winter night. The woman was incoherent. She only had a gown on. 

BALTIMORE (AP) — The man who said he came to the aid of a woman discharged from a Baltimore hospital wearing only a gown and socks on a cold winter's night, says he was left outraged and stunned at how she was treated.

Imamu Baraka, identified in local reports as the person who sought to help the woman, told The Associated Press he was so angry he decided to record Tuesday night's events on cellphone video, fearing no one would believe him if he reported a woman being left at a bus stop like that.

Michigan Mother Jailed over Vaccination Refusal

People have differing beliefs about the efficacy of some scientific or medical procedures. We have, within some very wide parameters, the ability to make these decisions for ourselves. Your body. Your choice. There are limits. You can't legally decide that ingesting cocaine and meth is the best way to spend your weekend. You can, however, eat and drink yourself into a stupor. An adult can refuse medical treatment for conditions or diseases that everyone knows require immediate treatment. The state or concerned family or friends face a high barrier trying to force an adult to accept medical treatment or drugs that he or she opposes. I know some doctors and lawyers who are frustrated by this. They snark that someone has spent a few hours on Google or WebMD and now considers themselves a doggone legal/medical expert. I've had discussions with friends and relatives who have what I consider to be conspiratorial paranoid mindsets. I know how irritating it can be when someone refuses to see reason. But this is our system. An adult doesn't have to justify his or her bad decisions. The state or other adults have to justify why they wish to substitute their judgment for someone else's.  

But children are a little different. With children the state has an independent interest, separate from the parents, in ensuring the child's health and life. When the parents disagree with the state or disagree with each other things can get messy. Rebecca Bredow, a local Southeast Michigan woman, shares joint custody of her son with her ex-husband, James Horne. Horne wanted his son vaccinated. Bredow disagreed, citing health and religious beliefs. The judge presiding over the case was unconvinced
. 

Republicans Fail to Repeal or Replace ObamaCare

The Republicans control the House, the Senate and the Presidency. Democrats can use procedural tricks,Senate tradition and appeals to the judiciary branch to slow down portions of the Republican agenda, but by and large Democrats can't stop anything that Republicans are bound and determined to get. The PPACA was passed without any Republican votes. Republicans swore that once they had the power to repeal it the PPACA or ObamaCare was dead meat. During the Obama Administration, the Republicans voted time and time and time again to kill ObamaCare. Some said they would replace it with something better but just about all of them agreed that ObamaCare had to go. Like yesterday if not before. But a funny thing happened over the years that ObamaCare was the law. A noticeable portion of the Republican constituency found that even as they hated ObamaCare and of course Obama, they loved the PPACA. Many of these people were so stupid that they didn't realize that the PPACA and ObamaCare were the same thing. 

Once Trump won the White House and had Republican majorities in the House and Senate ObamaCare should have been easy to repeal. But we saw this week that when it really came down to it Republicans, at least in the Senate, were people who, as James Brown might have said, just liked talking loud while saying nothing.  At this time the Senate could not bring itself to modify the PPACA or to remove it.

ObamaCare Lives Another Day

In case you somehow hadn't heard the Republican members of the House of Representatives could not come together to support the American Health Care Act (AHCA). I don't have a lot to write on this at the moment both because (1) I've already written at length why I think that the law (PPACA or ObamaCare) that the AHCA was designed to replace is destined for a slow ignominious demise and (2) my Day Job supervisor has made it crystal clear what my true priorities are during quarter close. And they aren't blogging. But I do just want to say that I think that both the defenders and detractors of ObamaCare are missing some critical points by getting lost in the partisan weeds of denying President Trump a win or trying to ascertain who is up and who is down in the Byzantine politics of Washington D.C.

Numbers don't lie. PPACA is a bad deal for younger healthier people. It doesn't reflect their expected value or risk. It's mispriced. They will, all else equal, continue to avoid enrolling in the expected or promised numbers. That's not going to change. The other thing which isn't going to change is that some of the very people who for the past seven years ran around spitting at ObamaCare, waving "Obama is a monkey" signs and voting for people who swore blood oaths to rip up the PPACA root and branch, turned out to have a different feeling about ObamaCare when Uncle Bud was covered for the cancer meds he needed or Cousin Sherri finally got enrolled in a program to help with opioid addiction. There are relatively few people who will, if push comes to shove, place their ideology over their survival. They won't brag about this. It's not the stuff of heroic stories. But it is human nature. And even a lot of big bad Republicans who wanted to kill Obamacare still flinched away from taking away popular benefits.

Now that there is Republican control of the executive branch with all of the awesome discretionary prerogatives of that come with it, Trump and his minions could accidentally on purpose help along ObamaCare to an early grave. And there wouldn't be too much that Democrats could do about it. Or given Trump's desperate need for acclamation, he could attempt to reshape the PPACA via executive fiat and administrative choice into something that keeps coverage for many voters but slows skyrocketing premium and deductible growth. I don't think this will work even if Trump were a detail oriented policy wonk, which he is most assuredly not. So the most likely scenario is that the PPACA continues to limp along until the next midterms and then the one after that and so on. It's never going to be unpopular enough to kill. But it will never be popular enough to fix either. 

Is ObamaCare Really Falling Apart?

Many people complained about higher premiums during the first Patient Protection and Affordable Care Act or PPACA (hereafter referred to as ObamaCare) enrollment period. With impressive celerity some media analysts and other ObamaCare supporters haughtily declared that all of those people were liars, frauds or Republican stooges. They were just too stupid to understand the good deal they were getting. Well you may have noticed that we are in the middle of a new ObamaCare enrollment period. And this time the profusion of complaints about sky-high premiums, high deductibles and co-pays, high drug prices, narrow networks or limited coverage simply can't be ignored or dismissed any longer. There's simply too much data available from the public, HHS, the various state insurance commissioners and the insurance companies themselves. Too many people are discovering that caveat emptor remains excellent advice when it comes to ObamaCare. Roughly half of the health co-ops have gone out of business while many insurers are requesting and obtaining double digit percentage increases in premium prices. If you, like most workers, are not receiving double digit raises at your workplace, an 11% increase in your monthly or bimonthly insurance premium presents a problem. Other insurers are hinting that they may leave the exchanges all together. The idea is to make money, not lose money. United Health is estimating an exchange loss of as much as $500 million. The best that supporters of ObamaCare can claim in response to this parade of horribles is that well things always cost more; this is probably the Republicans' fault somehow, and dammit we need single payer now. With the exception of a long shot funding question case argued by liberal apostate law professor Jonathan Turley and another frivolous dispute over who must sign a note saying they disagree with birth control coverage, all of the legal avenues to repeal or destroy ObamaCare have failed. Legally, anyway, ObamaCare is here to stay. The Supreme Court has twice declined to invalidate ObamaCare. Liberals met these Supreme Court decisions with transcendent joy, a Bronx cheer to conservatives, and internalization of the idea that legal victories meant that ObamaCare was a good thing. After all the Supreme Court said so. Anyone who questioned ObamaCare obviously hated people without insurance and wanted them to die. That is what many of the smart compassionate humane people told themselves. 

This is something of a deflection. In the C.S. Lewis Narnia book, The Magician's Nephew, Queen Jadis (The White Witch) tells the story of how, when faced with defeat in a civil war, she used a Deplorable Word which destroyed all other life on the planet besides herself. When questioned about the morality of this act Jadis responded that she won and winning is the only thing that counted. Fortunately there are no Deplorable Words for anyone to use. Still, like Jadis, ObamaCare supporters seem to have forgotten that a project's success can't be measured by just one variable. The only metric which they want to discuss is the number of people covered. What good is it to have people "covered" if they can't afford to use their "coverage"? Just because ObamaCare has been upheld in the the courts doesn't mean it will succeed. The problem with ObamaCare is (besides what I think of as an intolerable diktat to purchase a private good) is that the economics don't make sense. I said before that this ObamaCare program wouldn't work as designed. And it hasn't. ObamaCare framers attempted to ignore reality. Whether we like it or not, all else equal the population of older people costs more to insure than the population of young people. The population of women costs more to insure than the population of men. It's not possible to increase the coverage that insurance companies must provide, prevent them from charging gender and age based actuarially accurate rates, force them to cover pre-existing conditions, and think that consumer costs will decline. Costs won't decline! It's not politics. It's just math. 

BlueCross BlueShield of Tennessee said the 36 percent rate increase was necessary because it had lost money on its marketplace business after underestimating the use of health care by its new customers. In Minnesota, officials approved increases averaging 49 percent for Blue Cross and Blue Shield of Minnesota, the largest insurer in the market. Even with the increases, the company said, “Blue Cross is likely to experience continued significant financial losses through 2016.” Gov. Mark Dayton of Minnesota, a Democrat, said he was “extremely unhappy” with the high rate increases.

The Iowa insurance commissioner, Nick Gerhart, approved rate increases averaging 29 percent for Wellmark Blue Cross and Blue Shield, the state’s dominant health insurer, and 20 percent for Coventry Health Care. The higher rates, he said, were justified based on the plans’ experience. Rates will rise next year by an average of 4 percent in California, one of the few states that actively negotiate prices, state officials said. In New York, state officials said rates would rise by an average of 7 percent. In Florida, consumers will see increases averaging 9.5 percent, the state said. But in Hawaii, the insurance commissioner this month approved rate increases averaging 27 percent for the Hawaii Medical Service Association and 34 percent for Kaiser Permanente health plans.

LINK

Premiums, deductibles and co-pays have risen and will continue to rise. Younger and healthier people, faced with premiums and deductibles that don't reflect their risks, will be less likely to buy costly health insurance simply to subsidize someone else. The people who will purchase this insurance are also the people most likely to use it. That's adverse selection. Well that's great for the customer. But it's bad for the insurance companies who will raise premiums to offset their exchange losses which will drive more young and healthy people away which will make companies raise their premiums to offset their losses and hello Mr. Death Spiral. The entire program starts to unravel. The company can't afford to sell insurance and the customer can't afford to buy it. It's incredibly important to emphasize that if this happens it will not be because of Republican malfeasance. No Republican voted for ObamaCare. Any death spiral will occur because of ObamaCare's internal contradictions.

What should have taken place was an expansion of Medicare and Medicaid for the impoverished/aged population who wanted health care coverage and couldn't get it. Then there should have been tax changes to provide greater funding for people with chronic or pre-existing conditions who could not otherwise obtain coverage. And obviously there were other moves the country could have taken. What we did instead was to implement tax increases and other social changes thru the marketplace and thus cause greater distortions than a general tax increase would have done. Politically the Obama Administration didn't want to own a middle class tax increase, thus the imprudent claims that average premiums would drop by as much as $2500 per family per year. Well that didn't happen did it. Tax increases would have been painful and unpopular but they also would have been more transparent and honest. When I purchase a product I am seeking to get the best deal for me and mine. When I pay my taxes I understand that I am helping the larger society, including people in situations I may never experience or those in situations I am not old enough or poor enough to experience yet. Paying taxes and buying insurance are completely different transactions. Trying to pretend that they are the same doesn't work. If I am in the individual marketplace I do not want to purchase an insurance product priced for someone much older that includes maternity/pediatric coverage, birth control coverage, or other useless add-ons. And I won't buy it--especially if you're charging me 30% more than you did last year. I don't have the money to pay for 10% premium increases let alone three times that amount. Multiply that decision by a few million people and that's where we are today. For too many people it makes more sense to forgo coverage and theoretically pay a penalty.

ObamaCare isn't going anywhere just yet. ObamaCare (or at least the most critical portions) can still be saved. But saving it would require a Republican House and Senate that was interested in doing work instead of hurling invective and a Democratic White House that could admit, however obliquely, that it got some very basic assumptions completely wrong. Neither of these things will happen now. But with more and more union leaders complaining about the implementation of the Cadillac Tax and more insurers worried about losing money on the exchanges the next President likely will have both the opportunity and the political space to make some much needed changes. Hopefully the next time someone builds a new program, he will pay closer attention to economic incentives.  There are some worthy things contained within ObamaCare. There are also things which make no sense. Again, it's not about politics. I'm not on the Right. I would support a program that helped people to get coverage who needed it and couldn't pay for it. But I wouldn't support a program that did this at the cost of messing up everyone else's coverage. 

VA Secretary Eric Shinseki Resigns

This was hardly unexpected. When your boss refuses to give you words of support and your peers are distancing themselves from you it's time to do the right thing and fall on your sword like a good little soldier. I really think that the problems with the VA are both about the people at the top and the entire bureaucratic VA culture. I don't know if the next person to be approved as secretary will make any difference but as one lady manager told me quite some time ago "Your time for excuses and explanations ended when you took the job". If something happens on your watch you are responsible. Period. Nobody wants to hear about what the last Administration did or do not do, especially six years after you took over responsibility and actually ran on making changes. Once again, though this continues a pattern of the President and his direct reports seemingly being out of the loop when major bad mojo is going down. I really do think that this is at least in part a byproduct of the fact that before his election the President had never managed large organizations, either in business or in government bureaucracy. It is also in my opinion a byproduct of the fact that in a bipartisan sense, people love giving lip service to supporting the troops but are often nowhere to be found when the troops need help. Anyway, Shinseki gave us his ritual pound of flesh. It wasn't all his fault but apparently he didn't improve things either. I have no pleasure in seeing him resign nor am I saddened. Let's see if actual changes are made to how the VA delivers health care. I think that a voucher system allowing vets to get private coverage might be the way to go. There's no reason that anyone who laid it on the line for this country, whether you agreed with the policy or not, should have to deal with a p**s poor health care system. Heck, none of us should have to deal with such a system.

WASHINGTON (AP) — Veterans Affairs Secretary Eric Shinseki resigned Friday in a personal meeting with President Barack Obama, shortly after publicly apologizing for deep problems plaguing the agency's health care system that Obama called "totally unacceptable."

Obama said Shinseki had served with honor, but the secretary told him the agency needs new leadership and he doesn't want to be a distraction. "I agree. We don't have time for distractions. We need to fix the problem," Obama said.Obama said he accepted the retired four-star general's resignation "with considerable regret" during an Oval Office meeting. Shinseki had been facing mounting calls to step down from lawmakers in both parties since a scathing internal report out Wednesday found broad and deep-seated problems in the sprawling health care system, which provides medical care to about 6.5 million veterans annually.

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Why ObamaCare Won't Work As Designed

The PPACA (ObamaCare) launch, has been an unmitigated disaster. The infamous Healthcare.gov website does not currently work anything close to specifications. Anyone who initially worked on its design, coding, management, testing or quality assurance should be embarrassed to list that on their resume. Some places will fire you because your boss didn't like your looks. In other organizations you literally have to fall asleep at your desk frequently before management reluctantly asks you to leave. Time will tell which model the President prefers but right now it looks closer to the second than the first. The President's claim that he was out of the loop on website issues stretches credulity. Now we find out that he was indeed briefed on problems. Whatever. I believe that eventually the website will work well enough for most to obtain insurance and/or subsidies. By eventually I mean I don't know when. An administration official recently admitted that 30-40% of the backend development that supports the malfunctioning website has also not been completed, including the sections which handle the accounting and delivery of payments and subsidies. The government and contractors haven't coded or tested that functionality yet. The hits just keep coming. I already knew that there are some incompetent people in government and IT consulting firms. What I only suspected before but has increasingly become obvious is that ObamaCare will not work as designed. Let me tell you why.

Because people across the political spectrum tend to jettison critical thinking and become blindly partisan on this issue, let me say upfront that though I oppose the individual mandate, I want every American citizen who needs health care to be able to get it. The pre-ObamaCare insurance and health care system didn't work well for many people. I have no problem paying higher income taxes to cover the uninsured. I am not now nor have I ever been a member of the Tea Party. I do feel a certain sadness and frustration that a law which funnels millions of people into the caring arms of insurance companies and even has provisions for insurance company bailouts has in a weird world become the liberal call to the barricades. This attack dog mentality by some progressives towards anyone that would question ObamaCare confuses me, especially when President Obama is telling CEO's that he doesn't see a lot of policy differences between Republicans and Democrats and that their battles are mostly around rhetoric. His words, not mine, folks. ObamaCare "fixes" the issue for a minority by making things worse for everyone else. It does this because the law's authors placed an extremely high premium on "equality" while placing a low value on "freedom". The law also hides command and control values in free market drag. 

Let's examine this.
Insurance is based on expected value. All insurance works this way, whether it's auto insurance, home insurance, life insurance, or health insurance. Both you and the insurance provider are making bets about the possibility of uncertain future events and/or catastrophes. If you "win" the bet and something bad happens well then you get a payout. If the provider "wins" the bet and nothing happens then they keep the premiums you've paid. Obviously the provider has an incentive to define a payable event in the most limited way possible while the purchaser's interests lie in the opposite direction. There is room for government regulation around this. No insurer wants to pay out more than they have to. And no one who thought they had medical insurance wants to stagger into the hospital only to discover that the fine print in their policy excludes payouts on any day ending in "y".

If you believe I like working hard every day/Just step on my shoes and take my pay 
-"Just Got Paid" ZZ Top

But ObamaCare changes health insurance into something closer to a social insurance/entitlement program. It forces health care plans to offer items that not everyone wants or needs. It limits the insurer's ability to price actuarially based on 

• gender: women use more health care than men and live longer than men do 
• age: as we get older we get sicker and use more health care
• pre-existing conditions: someone who already has medical issues will use more health care than someone who doesn't 

The law's architects consider this "fair". Some claim that anyone who disagrees supports "discrimination". These requirements mean that not only will costs rise for most people but that also that there will be cost shifting. Younger people, men, and healthy people of both genders will on average be paying more for insurance than they were before ObamaCare. There's no such thing as a free lunch. That's worth repeating. If you require insurers to cover more conditions and more people the additional cost will need to be paid by someone.
Those required to pay more for insurance may not think this is good, especially when they were repeatedly told that they could keep their health plan and doctor. From either political reasons or hubris, President Obama and the law's designers were silent about additional costs. The mass policy cancellations and the sticker shock of higher premiums and deductibles for new ObamaCare compliant policies finally made the law real to many Americans. They didn't like what they saw. And they said so.

See the blind man on the street /Looking for something free
See the kind man ask his friends/Hey, what's in it for me?
-"Dog eat Dog" AC/DC

This is when the friendly face of ObamaCare morphs into something a little nastier. People opposed to paying hundreds extra per month for coverage they'll never use are derided by the law's supporters as Fox news watchers or drooling morons who can't comprehend their great deal. Suddenly all their previous plans are "substandard" or they're just selfish greedy people. Right. ObamaCare's fatal flaw is that it requires people to make economic decisions which are not in their best interest. People generally act in their own interest. And if I am a single man, or a woman who doesn't want, already had or can't have children, the purchase of maternity and pediatric coverage makes no sense for me. If I abstain from drink and drugs I don't need a policy which includes substance abuse coverage. And if I am a natural foods/alternative medicine enthusiast I will probably not be thrilled about paying for policies with prescription drug coverage. The government can tax these people and give their money to other folks. That would be honest. But telling people to enter a marketplace and purchase coverage they don't need so that other people can pay less is an economically illiterate idea. So far the numbers bear this out. New Medicaid enrollment is far outstripping private enrollment. If I couldn't afford or didn't want insurance before PPACA why would I buy a more expensive policy after the launch?  The President has also been stretching the concept of separation of powers as he and executive branch shot callers constantly delay enforcement of or provide waivers from this or that element of ObamaCare as another bad outcome becomes visible. I'm wondering if the President will postpone some ObamaCare requirements until 2020. Seriously. The law isn't supposed to be based on Presidential caprice. Congress needs to fix or delay the law. The President's forced and grudging declaration that people can really keep their, in his view, "substandard" cancelled policies for another year, provided the insurance companies and state commissioners agree, was a nakedly political move, which could cause exchange premiums to skyrocket even further. The policy cancellations are a feature of ObamaCare, not a bug.

If ObamaCare were a good deal then insurance companies could offer PPACA compliant policies alongside their previous policies without any government arm twisting to eliminate the older policies. Consumers could make their own choices. But that can't happen because not enough people would purchase the new policies. That tells me everything I need to know about the PPACA. Sooner, rather than later, it will implode from its internal contradictions. We needed to prevent the most outrageous insurance company abuses, expand Medicaid, raise taxes to create subsidized risk pools for those with pre-existing conditions. Instead we have the PPACA. The fact that many Republicans are rabid, racist and insane doesn't change the fact that the PPACA isn't working now and won't work as designed. And that's on the Democrats.

Money It's a crime/Share it fairly 
But don't take a slice of my pie
-"Money" Pink Floyd

Obamacare Losers

First of all, if you've got health insurance, you like your doctor, you like your plan - you can keep your doctor, you can keep your plan. Nobody is talking about taking that away from you."
President Barack Obama
7/16/2009

President Obama's statement has been shown to be untrue. I don't ascribe ill intention to the President or PPACA supporters. PPACA may prove broadly beneficial. But those who lose their current coverage and receive no government subsidies will be worse off. The counter to the claim that they're worse off is that their new plans will have increased level of (mandatory) benefits which are better for them and society. 

I am unconvinced by this argument. It's exactly like saying that instead of driving your $12,000 compact car with minimal upgrades and a low chance of being undamaged in an accident, you MUST purchase a fully loaded $60,000 large sedan, SUV, or pickup truck with a better chance of surviving a serious collision. So the government forces auto companies to stop making the $12,000 compact that you prefer. Though you have little financial capacity and less desire to drive something large which also has voice activated commands or rear view cameras, the choice isn't yours anymore.

At least 146,000 Michiganders — and possibly thousands more — with health coverage purchased directly from insurers now are learning their polices will end Dec. 31 because they don’t meet the minimum requirements of the federal health care act. Under the law, each policy must cover essential benefits in 10 categories. Instead of beefing up these policies, insurers are opting to drop them, advising consumers to consider other policies that are now available either from the insurers directly or though the Michigan Health Insurance Marketplace, also known as the state exchange. The policies that are ending were often less expensive on the individual market because they provided limited benefits and were sold to healthier consumers.

And that was fine with consumers such as Josh Mulder. Mulder had landed a plan several years ago that cost his Wixom family of four just $291 a month. That policy will end Dec. 31, according to a letter from his insurer. The policy didn’t cover things such as maternity care or prescription drugs, but, Mulder said, his family is generally healthy and he was willing to take the risk.“I had a great rate,” he said. Rates that meet the required benefits under health reform average $762.06 a month on the Michigan Health Insurance Marketplace for his family of four..

LINK

Purchasing health care is not like purchasing an automobile but the principle is the same. The government is mandating a specific choice. Maybe this is okay because the government already requires that vehicles have certain safety features and pass certain tests. You can't purchase a new car without seat belts or air bags.  

Often people who make this argument have trouble delineating any point where the federal government can't mandate or regulate. But let's take that objection seriously. It does have some validity. A government which wants to prevent vehicular carnage can surely attempt the same in health care no? I'd say no because drivers directly impact other people. The people detailed in this article are not those fierce individualists or (in some people's minds) lazy freeriders who haven't purchased insurance. They've already purchased insurance which fits their needs and budget. 

The government is making them purchase additional insurance which they don't need and may never use in order to subsidize other people's insurance choices. If I am a sixty something worker I may no longer need to cover my child until he's twenty-six. If I am a forty something man I have little use for insurance that mandates well woman visits or contraceptive coverage. If I am a thirty something fitness guru I may not desire extra coverage which allows multiple doctor visits. If I am a woman well past her reproductive years I may skip an insurance policy that includes maternity care. And so on.

Some might argue that such people are wicked selfish folks. Perhaps. But we are all self-interested. In a marketplace people are able to pursue their own self-interest. For some, the PPACA has reduced choice and raised costs. This is not a good thing.
A utilitarian may claim that it will all be worth it if the people with increased coverage and lower costs outnumber the people with the opposite. We lack that data. But if the PPACA's goal was to give coverage to those without, it may have been wiser to do a simple transfer payment. Raise taxes on everyone and give the money to those without insurance; cut taxes on those without insurance and allow them to use the money to purchase insurance, or open up Medicare/Medicaid to anyone without insurance, regardless of age or income.

Those decisions all have their own cost-benefit analyses. But they would have been more straightforward than reducing choices and raising costs for some with insurance in order to subsidize favored groups with insurance or give insurance to those without. I have no problem paying higher income taxes to get someone else insured. I have a major problem with being forced to buy coverage I don't want and lose coverage that I like. Can you afford to pay twice as much for insurance coverage as you do now? Because I couldn't. I think a law that results in that outcome needs editing. PPACA supporters may feel differently. That's fine. I simply ask that they at least acknowledge that the PPACA does harm some people. That data is in.

What are your thoughts?

Royce White: Sick Man or Unrealistic Child?

Every job has certain requirements. Generally speaking the more difficult these requirements are, the better paying the job will be. The more important the job is, the more critical these requirements are. This is common sense. I'm a solitary personality. I'm not a particularly adept or engaging public speaker. I don't like traveling more than absolutely necessary. So I work in a career field and more specifically in a job class where constant travel and public presentations aren't huge requirements. I very rarely must do either. Looking back I can say that I probably consciously or subconsciously steered my career this way. It was my decision. I realize now that I must change to make more money but that's my cross to bear.

Let's say I applied for and obtained a job where I needed to be an enthusiastic extroverted IT manager leading cross-functional teams in different countries, traveling most of the year and selling work to various business owners. This job would pay two to three times what I earn now, not even counting bonus. That's good. Immediately after I got the job assume I told my new boss that I didn't want to travel, hated doing presentations, didn't like rejection, corporate rivalries and backbiting, and disliked being responsible for anyone's work but my own. But I still wanted the big paycheck. Well my new boss would probably tell me to leave. She would be upset. Unproductive or unhappy subordinates make her job more difficult, call her judgment into question and put her year end bonus and future promotions at risk. So before hiring someone at a high skill, well paid job, companies usually try to make sure that the person can do the work and will be happy doing it.

That's the situation that the NBA Houston Rockets find themselves in with their employee, rookie forward Royce White.

The Houston Rockets suspended first-round pick Royce White for ''refusing to provide services'' required by his contract on Sunday.General manager Daryl Morey said Sunday that the team will continue to work with White in hopes of finding a resolution.White will not be paid during his suspension. White refused his assignment to Houston's D-League affiliate a week ago. The 16th overall pick in the June draft has spent most of the season on Houston's inactive list while he and the team figure out how to handle his anxiety disorder and overall mental health.

White has been vocal on Twitter throughout this saga, and he continued to voice his opinions on the Web site after the announcement Sunday.''What's suspending me suppose to do. I've been away from the team for a month 1/2. Guess we want to give it a title to shift accountability,'' he tweeted. 

The 6-foot-8 White missed the first week of training camp to work with the Rockets to create an arrangement to deal with his anxiety disorder within the demands of the NBA's travel schedule. He and the team agreed to allow him to travel by bus to some games while he confronted his fear of flying and obsessive-compulsive disorder. He flew to Detroit with the team for the season opener and then traveled by bus to Atlanta and Memphis for games. But he soon stopped participating in team activities and said on Twitter that dealing with his mental health took precedence over his NBA career. Then came his decision last Sunday to refuse his assignment to the D-League. Despite that decision, he said then that he still hopes to return to basketball in the future.

LINK

Now the Houston Rockets knew that White had issues with travel when they drafted him. They went ahead and did so anyway. And presumably White knew that professional basketball players play half of their games away from home. I know some people with diagnosed and undiagnosed anxiety or obsessive-compulsive disorders. Most don't like their condition. Most deal with it and are just as productive as anyone else. In some extreme situations they don't and the condition greatly damages their personal and professional happiness. This may be what's going on with Royce White. I am very sympathetic to someone who has mental health issues. You can't always just tell some people to suck it up or deal with it. That just doesn't work.

But if those symptoms interfere with your job so much that you can't do your job, you should take a different job. I don't think that Iowa State did White any favors by attempting to cater to his disorders. You can't be a professional basketball player, and a rookie at that, and have problems with flying. It's not a question of being unsympathetic to White or making fun of him. That's not my intention. It's just a question of job requirements. If you're claustrophobic, coal mining isn't the job for you. If you have body image issues, exotic dancing might not be the best fit. If you truly despise math and arcane business rules, don't be an accountant. I agree that dealing with serious health issues should always take precedence over your job. Most definitely. I just see White's situation a little differently. It's one thing to have a health challenge a decade after you've been doing your job, especially if that health challenge arose in part because of your job. It's something a bit different to take a job you know you can't do, refuse to do the job and then demand to get paid anyway. The world doesn't really work like that, especially if you're just starting out in your career. This isn't a case where a heartless corporation is uncaring about someone's health. At least not from what I can see. It's just not a good match. 

Questions:

1) Were the Houston Rockets right to suspend Royce White?

2) Is White correct to refuse assignment to the D-League?

3) Should the Houston Rockets find White alternative modes of transportation?

4) What's the best outcome here?

Obamacare, Tax Incentives and Patriotism

Now that Obamacare (PPACA) is being implemented we can see what the response to some of the law's incentives have been. Because the PPACA requires employers of a certain size to provide health care coverage to any full time worker, employers have an additional incentive to limit full time workers to only those who are absolutely necessary. If you happen not to be absolutely necessary or your employer's business model does not provide for a large number of full time workers, then your employer might decide to limit your hours so that you don't get full time work.

Employers from community colleges to Darden Group (Red Lobster, Olive Garden, Longhorn Steakhouse) to Applebee's have indicated that workers' hours could be limited to avoid health care liability. Stryker, a medical device manufacturer, is not very happy about the new 2.3% medical device excise tax, paid regardless of a company's profits, and has announced that it is reducing staffing levels by 5%. Stryker had other problems already of course, but no one who makes medical devices is pleased with the new tax. Papa John's founder John Schnatter, said that while he was happy that everyone would be getting health care, nothing was for free and he couldn't predict what the independently owned and operated franchises might do.

One study claims that increased costs under Obamacare for small businesses will be negligible thanks to statutory exclusions and tax credits. The problem is that the real world data doesn't line up with the study. Only 170,000 small employers, not 1,000,000 or more, claimed a tax credit. Per the GAO report, this is far fewer employers than originally estimated. It may well turn out that the employers know their business needs and costs better than the federal government does. And if it doesn't make financial sense for them to purchase health insurance they won't do so. It may be cheaper for a company to pay a penalty or reduce staffing rather than to provide health care insurance.

Fewer small employers claimed the Small Employer Health Insurance Tax Credit in tax year 2010 than were estimated to be eligible. While 170,300 small employers claimed it, estimates of the eligible pool by government agencies and small business advocacy groups ranged from 1.4 million to 4 million. The cost of credits claimed was $468 million. Most claims were limited to partial rather than full percentage credits (35 percent for small businesses) because of the average wage or full-time equivalent (FTE) requirements. 28,100 employers claimed the full credit percentage. In addition, 30 percent of claims had the base premium limited by the state premium average.

One factor limiting the credit’s use is that most very small employers, 83 percent by one estimate, do not offer health insurance. According to employer representatives, tax preparers, and insurance brokers that GAO met with, the credit was not large enough to incentivize employers to begin offering insurance. 

In addition, since there is a good chance that taxes will increase in whatever deal the President and Congress work out, some people are making moves now to reduce their tax burden by all available legal means. This could backfire on these people because taking a smaller gain now with a lower tax rate might not net them as much as a larger future gain with a higher tax rate but each individual must make the financial decision that is right for them. If you think the future gains won't offset the higher taxes then recording income now while taxes are low could be the smart move.

Business owners and investors are rapidly maneuvering to shield themselves from the prospect of higher taxes next year, a strategy that is sending ripples across Wall Street and broad areas of the economy.Take Steve Wynn, the casino magnate, who has been a vocal critic of higher tax rates. He and his fellow shareholders in Wynn Resorts, the company announced, will collect a special dividend of $750 million on Tuesday, a payout timed to take advantage of current rates. Experts estimated that taking the payout this year instead of next could save Mr. Wynn, who owns a sizable stake in the company, more than $20 million. 

For the wealthy like Mr. Wynn, the overriding goal is to record as much of their future income this year as they can. This includes moves as diverse as sales of businesses, one-time dividends and the sale of stocks that have been big winners.“In my 30 years in practice, I’ve never seen such a flood of desire and action to transfer a business and cash out,” said Kenneth K. Bezozo, a partner in New York with the law firm Haynes and Boone. “We’re seeing a watershed event.”Whether small business owners or individuals saving for retirement, investors are being urged by their advisers to reconsider their holdings.

Along the way, many are shedding the very investments that have been the most popular over the last year, contributing to recent sell-offs in formerly high-flying shares like Apple and Amazon. Investors typically take profits in their own portfolio at year-end, but the selling appears to be more targeted this year. Stocks with large dividends, for instance, are seen as less attractive because of the perceived likelihood of a sharp increase in the tax rate on dividends.

These moves were thoroughly predictable. Some people who opposed the PPACA pointed these things out before hand but they were often ignored. These decisions seem to have incited some derision and anger among people who supported the PPACA and higher marginal tax rates. Some have argued that paying (higher) taxes is patriotic. Certainly the late NY Mafia Boss Frank Costello thought so. But regardless of your patriotism and love for your country, business is business. Nobody in their right mind sits down to do their taxes and then decides to pay more than what is owed to the Federal government. If the Federal government passes a law that says if you do x, y, and z then you owe this amount, it should not be surprised or upset if people do their best to avoid doing x, y, and z. The government might get less than what it expected to get in revenue because, ceteris paribus, people suddenly find incentives to change their behavior. If the behavior being taxed is not strictly speaking 100% necessary or otherwise unable to be changed, when you tax something you will generally get a little less of it.

And tax avoidance is 100% legal. It's tax evasion that will get you in trouble. If a state raises its income tax I can move. If the federal government tells me that capital gains are taxed more lightly than income, I can start buying more stocks, real estate and start or purchase a business. If a city tells me there is a toll involved in using a particular expressway, I can take another route. If the federal government tells me that I pay less in taxes by using an IRA or 401K to save for retirement, then I may well investigate doing so. If I am paying $2000/mth in rent and discover that I could pay the same amount for a mortgage and deduct local property taxes and interest from my federal taxes, you know I just might consider that move. And if the federal government tells me that hiring this person will cost more than I think the employee is worth, then I may do my best to get along without hiring that person. This is the essence of economics. People respond to incentives.

People supported the PPACA because they thought it was the just thing to do. And maybe it was. Time will tell. The costs involved and changes made may be quite small once all the dust settles. But that doesn't change the fact that it will cost. At the margins, some behaviors will change. I don't see this as especially surprising or troubling. What I do see as troubling is the outrage and bewilderment among supporters of the PPACA that people actually make decisions based in part on economic incentives. Just as there is an observer effect in physics, there is a taxing effect in economics. No one likes The Taxman.

Questions

1) Do companies have the right to investigate changing staffing and pricing in response to the PPACA? Are you surprised by these moves?

2) Are some companies and individuals blaming the PPACA for their own poor financial decisions? Are these just post-election temper tantrums?

3) Do you pay more taxes than you owe? Is it unpatriotic to limit your tax liability? 

ObamaCare and Healthcare Costs: Revisited

A classical economics truism is that in an efficient market there is no way to make one person better off without making another person worse off. This is often used as an excuse not to make any changes. This could also be why the study of economics often seems to attract people who are invested in maintaining the status quo. This argument's weaker form is something that many people would agree with even though it tends to be associated with right-wing libertarians. This idea, famously made popular by libertarian speculative fiction author Robert Heinlein is TANSTAAFL (There Ain't No Such Thing As A Free Lunch). This means that every decision we make has costs and consequences. We need to account for these when we make policy choices. Again, someone who likes the status quo will piously invoke this saying and then refuse further investigation to see what the actual costs are. That's wrong.

But it's also wrong for someone who wants to change the status quo to ignore the unpleasant fact that there usually are costs. We have to at least review the costs to see if they're worth the change. This ultimately slides into a bit of utilitarian type of thinking, which is ok if you're trying to decide what a taxicab badge should cost or how much your property tax should be, but may not be the correct frame to use in questions of justice. For example no one, well few people anyway, will question the cost of liberating slaves or giving women the right to vote or stopping the arrest of homosexuals for being homosexual. If those things are right, then costs simply don't matter and you're probably a pretty cold heartless SOB for even bringing that question up.

So then if you want to change something but don't want people to think about costs you definitely need to frame the change as a question of justice. If you don't want change and wish to avoid arguments about justice you need to focus on costs and unintended and unforeseen consequences. We saw some of this play out in the arguments over ObamaCare. However as it turned out both sides (pro and con) strongly believed they had an excellent argument about justice (the individual mandate vs. the numbers of uninsured or the importance of universal birth control coverage) and as a result the popular discussions over the PPACA didn't really focus on costs. Rather cannily the Obama Administration and Congress set up the legislation so that most of the more unpleasant changes would arrive AFTER the 2012 election. Well that election will shortly be completed and absent an extremely unlikely sequence of events the PPACA is here to stay. As a result companies and organizations have begun to adapt to the law's less pleasant incentives. It's important to realize that these things aren't bugs. They're features.

Over the next 18 months, between one quarter and one half of Americans who get insurance coverage through their employers will pay more of their doctor bills themselves as companies roll out health care plans with higher deductibles, benefits consultants say. The result: sticker shock.

"They have huge out-of-pocket costs before they get any insurance coverage, it's a real slap in the face," said Ron Pollack, the executive director of Families USA, a health care advocacy group. High-deductible plans set a threshold for medical expenses that an individual must pay for, often in the thousands of dollars, before insurance kicks in. Studies show people on these plans are three times more likely to delay or skip care than people on traditional plans, where doctor or emergency room visits are covered by a relatively low co-payment.

These plans have been around for years, pushed by employers, insurers and industry experts who believe that consumers with "skin in the game" will drive demand for better quality care at a lower cost. It is a rationale also backed by President Barack Obama's Republican challenger Mitt Romney.

But now corporate America's adoption of high-deductible plans is accelerating, partly because of Obama's health care reform, which requires insurance plans to provide more expansive coverage such as preventive care.Several industry surveys forecast a two-percentage-point increase in the number of companies offering only high-deductible plans in 2013 to about 19 percent, and a larger jump of anywhere from 5 to 25 percentage points in 2014.

LINK

This is a really important concept. Because insurance companies are being forced to provide more expansive coverage, can no longer correctly and routinely rate coverage differently by gender and age and must include people on their parents' coverage until age 26, their costs will increase. In order to mitigate some of that cost increase the insurance companies intend to share this cost with the sucker insuree. As the article briefly references there is also a philosophical belief among the people who brought you "health care reform" that a big reason behind health care cost rises is that people just demand and consume too damn much health care. And how better to cut down that demand than to raise the price, hence the increase in high deductible plans. See how well this works out for everyone? Well maybe not you but heck at least more people will have health care coverage and everyone gets free birth control!! YAY!!!!

The problem with this line of thinking is of course that with few exceptions no one just runs down to his or her doctor and starts requesting hysterectomies, colonoscopies or angioplasties just for the heck of it. No one looks at their health care coverage plan, sees that he only has a $250 co-pay for major procedures and promptly books himself into the hospital for a weekend dialysis session. I mean for just $250, how could you pass up that deal?

People go to the doctor or hospital when they're sick, when a loved one urges it, when an insurer or employer demands it, or for a regular check up (yearly, quarterly, monthly, etc). Price isn't really a consideration. The demand for doctors is not very elastic. I will switch car washes if the new car wash costs $1 less and has the same quality. The same is not true of doctors. Trust is a huge element here. When I "shop around" for doctors I am more concerned with trust, experience and expertise than with cost. Lower cost doctors might actually give me a BAD feeling. Money matters but doctor and patient do not share the same level of knowledge. If my doctor tells me I need to undergo this procedure or take this medicine, generally speaking I am not qualified to question his decision or try to jaw him down about costs. At best I can go with a gut feeling or maybe get different opinions but if every doctor I see says "Yes you need to take this medicine and/or have this procedure done or you will die/be crippled/live in horrible pain for the rest of your life" then that's what I'm probably going to do. No one who is having a heart attack demands to be taken to Dr. X instead of Dr. Y because he has a 10% off coupon from Dr. X. Very few of us could afford to pay the true cost of a required procedure. That's why we have insurance. Delaying your car's scheduled oil change until next month's paycheck is one thing. Ignoring that new spot on your body or that cough that won't go away involves an entirely different set of consequences.

As the higher deductible plans roll out employed people will pay more out of pocket for health care coverage. This contradicts the President's breezy assertion that "If you like your health care plan you'll be able to keep your health care plan, period. No one will take it away no matter what." I guess strictly speaking it's still your health care plan but the price will have gone up and the coverage may have shrunken. So it really won't be what you had before the PPACA. This makes employed people unambiguously worse off.

This really stinks because as an employed person I lacked real complaints about my health care coverage. And for those who didn't have health care coverage because they weren't employed or their employer refused to offer the benefit, I would have supported opening up Medicare/Medicaid for them. That would have made more sense than the PPACA but because the Administration was determined to keep the private health care industry happy it made the decision not to go down that path. So if you're employed you get to enjoy higher deductible plans and most likely higher premiums as well. Let the good times roll!!

Time will tell if PPACA was a good idea. I think not. Others may think differently. But at the very least we should all realize that it was not cost-free. There really ain't no such thing as a free lunch.

Thoughts?