Tuesday Evening Highlights

Good evening.

  1. Well, that makes my day seem mundane (which might not be entirely a bad thing).
  2. What’s going on in Afghanistan … doesn’t seem like a COIN operation, I wonder why not?
  3. Well, my second favourite cyclist crashed.
  4. One man’s reaction to Microsoft (and a far cry from yum or apt-get).
  5. Obama and Up!
  6. Indeed. “What happens if cost growth exceeds projections, the way it has in Massachussetts, and AFAIK, every Federal health care program ever?  Where do we get more money?”
  7. I’d suggest the biggest reason is on the evening news scientifically predicting the weather every day and getting it wrong so often
  8. Catching Hillary being, well, not thinking exactly.
  9. A Soviet scientist.
  10. Russia’s schools.
  11. It’s not for their good, it’s to ease the possibility of our pain.
  12. Obamacare killed?
  13. This is something everyone should read … and then ponder Obama’s notion of a moderate Iran and the need to open relations with them.
  14. On the living Christian life.

19 Responses to Tuesday Evening Highlights

  1. Indeed. “What happens if cost growth exceeds projections, the way it has in Massachussetts, and AFAIK, every Federal health care program ever? Where do we get more money?”

    Cost will exceed projection either because:

    A. Benefits are worth the money – In which case you raise taxes to pay the additional benefits.

    B. Benefits are not worth the money- In which case you lower costs by covering less.

    For example:

    Imagine a 100% perfect cancer cure was discovered tomorrow. According to http://books.google.com/books?id=BwuiQAiR7j8C&pg=PA386&lpg=PA386&dq=economic+value+of+curing+cancer&source=bl&ots=WnkODATeeX&sig=dhuowJQWG9jr4Ac1FduO_dj7i3k&hl=en&ei=lS1nSr2DAZDqsQPFw9zvDg&sa=X&oi=book_result&ct=result&resnum=2 a cure to cancer would be worth about $46.5T. At 300m people in the US that works out to roughly $15,500 per person. What if this cure costs $10,000 per person? Pay for it, borrow the money and raise taxes to pay it off. Yes $10K is a big tax hike, but everyone is made richer by $15.5K (on average, of course). If the cure is $30K per person then don’t fund it.

  2. Boonton,
    Man you really suck the koolaid down. Those are the two reasons for cost overruns in “every Federal health care program ever” government programs?

    Might their be cost overruns because the costs were not accurately assessed in the first place?

    Costs exceed projections because:

    C. Promises are made regarding benefits and the costs for said benefits (greatly) exceed the expected amount.

  3. I didn’t assert that ‘cost overruns’ wouldn’t happen, I answered your question of what to do if they did.

    Interestingly, though, I’m not sure ‘every program’ has had cost overruns. The VA health program, I believe, has been pretty well contained in costs. Social Security has not had cost overruns (the estimates of lifespan and the population over 65 done in the early 1930’s for the 1980’s turned out to be almost dead on).

    But I think the way to address the cost issue is to forumulate the entitlement carefully. Medicare is an open ended entitlement. If a senior needs a million dollars of procedures every day, Medicare pays for it. There is no real way to control costs directly in Medicare other than to lower doctor reimbursements (which drives docs out of the system) or to adjust the age people get Medicare and hope that will keep the sick people out for a bit longer (but a 66 yr old is likely to be relatively healthy compared to an 80 yr old….so dumping people off the program to lower costs requires dumping a lot of realtively healthy people)

    But if you’re entitled to a ‘health plan’ the entitlement is not so open ended. Consider a voucher plan. If the voucher is $2500 you can buy a certain quality plan today. It’s not going to be the best plan. What if costs rise? Well the quality of the plan is going to fall. That could mean a higher co-pay, a higher deductable, a more restrictive network of allowable docs, more data-mining and meddling by the insurance company in the decisions docs make (why aren’t you prescribing a generic doc? ). The response will be you will either accept the lower plan or supplement it with your own cash to maintain the same quality at a higher price.

    Speaking of vouchers, this would be the same answer to the question of “what if we replaced schools with vouchers but the cost of education continued to rise?”

    BTW, I think I made an error. The individual benefit to a 100% cure for all cancers would be on the order of $155,000, not $15,500. But this illustrates an important point about costs and benefits. If curing all cancer yields a benefit of $46.5T in the US, what is the benefit of curing 1% of all cancers? $456B. That’s nearly half of the supposedly horrifying cost of $1T over ten years. Now I’m not saying a cure for cancer will be found by the health plan but it’s not exactly impossible to see how 1% of cancers might be effectively cured by early intervention and lifestyle changes that might be motivated by some type of universal coverage.

    That 1% who aren’t cured today do in fact cost us $456B. We just don’t see the cost because it doesn’t show up as a line item in the Federal Budget or as a charge on our credit card statement. Nonetheless it is as real a cost as your mortgage payment, if not more so. It shows up as half a trillion dollars less in income earned, money that could be spent on things more enjoyable than chemotherapy, hospice care and funerals.

  4. ohhh, btw, Medicare Part D (the drug part) did, I believe, turn out to have lower costs than projected. This was due to several factors. One is that that consistent drug use (not skipping to save money) often reduces more serious medical expenses (think of the diabetic who skips the premium long acting insulin a few times a week). Another was more drugs going off patent and not being replaced by new ‘blockbuster’ drugs (that’s actually a bad thing since it means drug companies have been making fewer improvements recently than in the past….if Sony doesn’t make a new Playstation the cost of the existing system will keep falling)

  5. Terrible news about Jens’ crash and broken cheekbone. First Levi, now Jens. I like him a lot too!

  6. Boonton,
    Why are you talking vouchers? Your party isn’t.

    How about a compromise. If I were a lawmaker, I’d go for “voucher based” universal healthcare if it included measures to strictly means test all government entitlements.

    Ms M. Minerva,
    My two favourite riders are Spartacus and Jens.

  7. What are the material differences between the plan and a voucher program?

  8. Boonton,
    You don’t know? In a voucher program the government is not doing any actuarial benefit/cost calculations.

  9. Are you talking about the public plan proposal? How is that different from a voucher program that keeps the existing public schools as an option?

  10. Boonton,
    ?! Uhm, if you want to compare this to schools … you’d have a situation where you are suggesting that adding public school systems to a private only initial condition are equivalent to a private school + vouchers program in the absence of any public schools at all. I don’t see how you can pretend those are the same.

  11. Well when public schools were first introduced by definition all schools were private then. I don’t really get what you’re trying to say. Imagine a school system puts in a $4,000 voucher. A parent looks at the local school:

    Catholic: $4500 not bad

    Private School A: $6500 ok

    Private School B: $7500 great elitist place

    Private school C: $4000 not bad but on the other side of town in the ‘bad neighborhood’ with no transportation

    Or they can opt to simply remain in the public system.

    I don’t see how this is fundamentally different except we aren’t calling it vouchers.

  12. actuarial benefit/cost calculations.

    Voucher programs don’t have cost calculations? How’s that?

  13. Boonton,
    Voucher programs need to calculate actuarial data. They only have to look at the aggregate results of others calculations.

    Uhm,

    Well when public schools were first introduced by definition all schools were private then.

    When was this? Schools have been public in American in most communities for quite some time. But yes, you note the four choices with vouchers (sidestepping the means testing matter). But note “they can opt to stay in the public system”. There is no public insurance system now, you’re pretending you’re going to create one … and after you do then it will be the same. Vouchers are not the same. Vouchers mean there is no analogy to “public schools.”

    I don’t see how you don’t see a difference.

  14. Boonton,
    Oh, and furthermore we still don’t have a federal public school system, it’s all run by states.

  15. Perhaps it would be helpful to evaluate the original argument(s) we had here earlier. You asked for examples of gov’t programs that did not exceed cost estimates. I gave you several. You asserted you don’t like a universal entitlement. I pointed out that so far the entitlement part of this program does not appear open ended but capped as a voucher program is (a voucher doesn’t guarantee you a private school no matter what the price, only the amount of the voucher). Let’s not quibble over whether or not a voucher program could include a ‘public option’ or must be ‘pure’ and ditch all public schools. In the real world, almost all voucher programs include the option to remain in the public school if the parent wants.

  16. Boonton,
    Cost overruns

    I gave you several.

    Chief among your cost overruns is Social Security which is nothing but a monstrous cost overrun. When my grandfather enrolled in SS he was paying 1% to his payroll tax. Now I’m paying 15% and I don’t really expect to get a dime of it back.

    Medicare is an open ended entitlement. If a senior needs a million dollars of procedures every day, Medicare pays for it.

    And in Illinois, Medicare makes ends meet (according to a Dr friend of mine) by paying 50 cents on the dollar of what they contracted. No cost overruns there … or should we rephrase that … it is nothing but a monstrous cost overrun.

    And then you suggest “consider a voucher plan” … oddly enough the voucher plan is does not appear to be a leading Democrat candidate for health care. Perhaps you push it because it is the only thing on the table that might have a chance of controlling costs?

    Can you add “means-tested” as an adjective to your vouchers? If not, why not? Why not add it to Medicare and SS as well? We might start get our SS taxes back to the low single digits if we did that after all.

    The point I’m trying to make, which you keep ignoring, is that there is no reason for a “public” option if you’re going the voucher route. There is no public option now, why invent it?

  17. Mark, you clearly don’t know what a cost overrun is. If you’re planning a party and expect 20 people and will buy one sixpac per person you’ll plan to spend, say, $120. If 30 people show up and you have to buy more that is a cost overrun. Likewise if you discover that the price of beer has unexpectedly gone up, that too is a cost overrun. If the party works out more or less as planned and you decide to throw another that is NOT a cost overrun.

    Social Securities growth has not been caused by faulty estimates of the number of retired or how long they live but by the decisions made over the last decades to expand Social Securities benefits.

    And in Illinois, Medicare makes ends meet (according to a Dr friend of mine) by paying 50 cents on the dollar of what they contracted. No cost overruns there … or should we rephrase that … it is nothing but a monstrous cost overrun.

    1. I’ll ask again are you sure you aren’t talking about Medicaid? Medicaid is state and Federal run program where the Feds match what the states put in. The situation you describe above sounds like a Medicaid thing rather than a Medicare thing.

    2. By what convoluted reasoning is that a ‘cost overrun’? This sounds like the age old business practice of shafting suppliers (similiar tricks include taking extra long to make payment, ‘rejecting’ claims for trivial technical problems and so on). Both business and gov’t play that game up to the point where either you face the danger of losing a needed supplier or you end up with a court order against your antics. There’s a lot to be desired in the situation you describe but it doesn’t sound like a ‘cost overrun’.

    The point I’m trying to make, which you keep ignoring, is that there is no reason for a “public” option if you’re going the voucher route. There is no public option now, why invent it?

    If you want we could talk about the reasons for it (you did claim to read many times more about healthcare than you write about it so I’m sure you’ve explored the reasons for a public option and could speak to them if you made the effort). But let’s keep it simple….why not try it?

  18. Boonton,

    By what convoluted reasoning is that a ‘cost overrun’?

    You don’t have to shaft your suppliers if you don’t have cost problems, right? And business’s can’t shaft suppliers in the presence of contract unlike the government.

    But let’s keep it simple….why not try it?

    I’m sorry, “why not” is not a sufficient reason for a large government expansion. It’s akin to a “some people are hungry” let’s move to a “single payer government food provider” just to “try it”.

    Oh, btw, I’ve started watching “Gangs of NY” (storms were predicted so I rode downstairs). I’ll continue at the next inclement weather arrival.

  19. the more I read the more skeptical I am of your doctor friend’s claim. Medicare does not ‘contract’ as far as I can tell at the state level but reimbursement is set by Congress (see Tuesday’s Wall Street Journal supplement on health care).

    Who exactly ‘contracted’ here? Somehow I don’t think your doc personally contracted with Medicare. So I suspect what is happening is that he is getting 50% of what he thought he should be getting but that requires some investigation into why he *thinks* he should be getting that rate. Since he and many other docs take Medicare it would seem to me that he is getting a market rate. Everyone thinks they are underpaid, that doesn’t mean our bosses are shafting us.

    Oh, btw, I’ve started watching “Gangs of NY”…

    Excellent choice. A well done film about a period and place that receives very little attention. I’m about 50% of the way through the Public Works Trilogy myself….

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