markorton

Healthcare and Markets – why don’t they work together?

A consistent chattering point in American discussions of healthcare is the claim that if we can only bring transparency and competition to healthcare we will drive prices down and bring sanity to healthcare. The rest of the world knows that this is not the answer but we seem to remain in the thrall of universal free-market thinking.

To answer this question lets start with an example of a market that works reasonably well and which we all know very well. In our little patch here in Hudson we have four supermarkets within about a six mile radius servicing roughly 20 thousand people. I can choose to shop at Price Chopper, ShopRight, Hannafords, or Walmart. There are also farmer’s markets and roadside stands. I have lots of suppliers to choose from. Generally I shop at two places, but I certainly stop at all of them with some frequency. When I step inside I regularly pick up the green and red peppers, the onions, and other vegetables that I like to chop up for my cooking. Now, I do not hold a degree from CIA (Culinary Institute of America) so I am not exactly expert, but I generally can identify a fresh vegetable when I see one. Unlike some Presidents I do know how much things generally cost and there are price points for green peppers, for example, that reduce how many I pick up from three or four to one or none.

So,  a functioning market has a number of suppliers (sellers) and lots of buyers. The product for sale is understood by the buyers and they can examine it for quality readily. Prices move up and down in reaction to supply and demand. Market capitalism in action.

Health is not a green pepper

Health is complex and above all it is about life and death of the buyer, me and you. It is inherently emotional. Generally, people will do whatever is necessary to avoid pain and discomfort. This is not a choice between green and yellow peppers. Further, diagnosis and treatment options require many years of advanced education and training to understand. It is simply not true, and never will be true, that people without this training can make well informed decisions about which treatment path to take. Then, unlike our supermarket example, here in Hudson there is one supplier of health services, Columbia Memorial Health, the local hospital. To choose a different supplier I can drive an hour north to Albany or 45 minutes south to Rhinebeck. Even in Boston where I lived for many years, the choices were broader but then I was faced with the fact that the appearance of choice confronted me with my lack of expertise to make a well informed optimal decision. Health is not green peppers. Doctors and hospitals are not grocery stores. I did not graduate from Harvard Medical School.

Fee for services not for health – perverse incentives in action

In reality our market based healthcare system operates just as one would expect given the imbalance of expertise and relative small number of suppliers.  The suppliers have enormous power and they are taking advantage of the buyers, us. They set the prices as they wish. Through historical accident we have added a mixture of government and private insurance that obscures what is going on. Worse, this market is not selling health at all. In a self-enriching cycle, the doctors and hospitals are incentivized to use as many tests, procedures, and prescriptions as possible. They are paid for these; not for health. This is the pay for service model.

Every other developed country in the world understands all of this very well and has for decades. Each country has evolved systems to establish a national or regional budget per capita for health. This is done in negotiations between the government, other stakeholders, and the medical providers. The providers are expected to deliver health. Markets and profits enter, if at all, only peripherally. It is up to them to determine how many tests, procedures and drugs to prescribe. They can decide that preventive medicine is more effective than costly technology intensive treatment. They  optimize the mix.

The proof is in the pudding

Here are a set of facts that speak loudly to both the cost and poor quality of the American healthcare system. The US spends $9,800 per capita on healthcare. Our developed country cohort spends approximately one half of that (excepting Switzerland the outlier at approximately 70% of our spending). These countries all achieve a life expectancy between 81 and 83 years while the US is at 79 years. This numerically small gap in fact represents a very significant gap in performance. According to the most recent CIA World Factbook: “The US ranks 56th in infant mortality out of 225 countries; 48th in maternal mortality out of 184; and 42nd in life expectancy at birth out of 224.“ These facts should outrage all Americans.

Click for large size.

The Democratic Party and Healthcare – Preserving Obamacare Cannot Be The End Game

While our current attention is on the Republican Party’s transfer of wealth to the rich and corporations through the charade of a healthcare reform, the Democratic Party needs to face up to its future and the future of our healthcare system in particular.

The Global Context

The chart shown here tells you everything you need to know about the outrageous amounts of money we pay versus the astonishingly poor outcomes for our health. Basically we pay twice (200% more) than almost every other developed country in the world for healthcare that is distinctly second rate.1 To put it simply we have a healthcare system that is ripping us off and laughing all the way to the golf course. It is a market system that incentivizes tests, procedures, and prescriptions, not health. It is a market system in which the providers, doctors, hospitals, insurance and pharmaceutical companies set prices as they wish.  Our healthcare system consumes just shy of 20% of our economic output. Our developed country competitors use 8%-10% of their output.

click for large size.

Preserving Obamacare is not enough to bridge these gaps.

Obamacare addresses the lack of access to healthcare in a significant but hardly comprehensive manner. It only hints at changes to the incentives and pricing that drive the unhealthy outcomes. Obamacare is not the solution. Better than nothing, but given the enormous resources being spent and the fundamental failings of the outcomes it is not sufficient.

Health Not Profits

In order to create a world class healthcare system we need to focus it on health not profits. Every other developed country long ago recognized that a market based system would not work because health is not a commodity like corn, cars, or cell phones. It is complex, multi-dimensional, and emotional. It requires a system capable of a holistic approach to people and the society they live in. Each of the countries with universal healthcare approaches implementation very differently in the details, but all have some sort of national/regional health budget that is negotiated with the various constituents. This amounts to a lump sum per person with which the health system operates to deliver health outcomes. The proof that it works is in the chart above. 

Outrage and Political Will – Stop Taking Big Money from the Rich and Corporations

The Democratic Party must absorb the reality of our situation. We need to develop and express some outrage at the current healthcare providers. It will not be a simple task to bring a sector of the economy that consumes nearly a fifth of economic output to understand that we cannot allow this to continue. We need them to evolve to a system that consumes a tenth while vastly improving healthcare for the entire population. A basic truth here is that we as a society cannot and should not allow one sector to consume so many resources, so inequitably, for such poor outcomes. In the global context this is not sustainable and makes us less competitive and less flexible to meet the changes. 

None of this will happen as long as Democrats are taking money from the rich and corporations. If there is a single lesson from the Bernie Sanders campaign it is that with messages and programs that reflect the needs of the vast majority of Americans, you can raise enough money to fight off the Republican Party and its wealthy and corporate sponsors. Time to start now.

  1. The US ranks 56th in infant mortality out of 225 countries; 48th in maternal mortality out of 184; and 42nd in life expectancy at birth out of 224. – source Current CIA The World Factbook – https://www.cia.gov/library/publications/the-world-factbook/ accessed 5/13/2017 []

Trickle-Down Returns to Enrich the Rich

As the rest of us are recovering from the outrageous Senate healthcare bill released this week, Trump and the Republican Party are having closed door meetings to shape their “reforms” to the Federal tax system. Get ready for a resurgence of rhetoric about how enriching the rich will generate a surge in economic activity that will raise all boats. There will be lots of talk about “pro-growth tax reforms”. This is the return of 1980s trickle-down economics. The basic notion is that if you put more money in the pockets of the rich and corporations they will invest in creating new businesses and jobs. Thus the money trickles down to the bottom. Trump and his Republican Party allies have already claimed that this will increase the growth rate of the economy from its recent typical of 1.5% to 2% annual growth to over 3%. The difference of this one percent has enormous implications. At 2% growth the economy doubles in 36 years. At 3% growth it doubles in only 24 years.1

Trickle-Down – The Reality 

BUT, no economist, banker, or corporate chieftain not on the payroll of Trump and the Republicans believes this will happen. Leaving aside all sorts of analysis about demographics (aging population), technology, and global competition, history and current events provides a fairly comprehensive rebuke to these trickle down cover stories for the Republican give backs to the rich and corporations. Trickle-down economics was invented in the early 1980’s to explain the wisdom of Ronald Reagan’s tax “reforms”. Much space was taken up with displays of Prof. Arthur Laffer’s demand curves that were passed off as proof from the academy that enriching the rich and corporations would unleash a new wave of economic activity. Nothing like that happened in the 1980s. Nothing like that happened in the first decade of this century after Bush II’s big tax cuts.2 And most recently in Kansas, the Republican dominated State legislature had to override the governor’s veto of tax increases after a 5 year experiment there with trickle-down drove the state nearly to bankruptcy.3

Nevertheless, get ready for another round of bull shit Republican propaganda about “pro-growth tax policies”, unleashing the over-regulated, over-taxed job creators, and a great surge in economic growth. The forces of free-market capitalism just need to be freed from the shackles of government. You will here all of this and more. The media will continue to do its job of repeating all of this. You need to be clear that the vicious Republican Party is at work for their masters among the rich and corporations. There job is making sure that the 40 year stagnation in incomes for the 80% will not change course and the flood of wealth will continue to those at the top. 

 

  1. This is the rule of thumb exercise. To calculate how many years a given percent of growth or interest will take to double the initial amount you divide 72 by the growth rate – e.g. 72/2=36. []
  2. See “Trump’s Big Tax Cut Is Unadulterated Trickle-Down Fundamentalism” by Justin Miller 4/25/2017 at The American Prospect []
  3. Read “Epic fail of Kansas’ tax-cut plan offers a lesson for us all” by Eric Zorn in the Chicago Tribune 6/20/2017 []

The Republican Party – vicious at the edges

A brief review of how the so-called moderates and the fundamentalist right wing of the Republican Party are reacting to the Senates healthcare bill demonstrates how fundamentally vicious and immoral the whole party is.

Though facts may be out of style lets just take note that we live in one of the wealthiest countries in the world. Also take note that the rest of the developed world provides universal high quality healthcare at roughly half the cost or less of our system which ranks near third world in performance.

The “Moderates”

Susan Collins, Senator from Maine, finds solace in what she perceives to be increases in support for low income people but is “concerned about the long-term cuts to Medicaid funding.” Senator Dean Heller of Nevada is likewise concerned about Medicaid cuts. Senator Lisa Murkowski of Alaska doesn’t want Planned Parenthood defunded. Senator Rob Portman of Ohio- “I continue to have real concerns about the Medicaid policies in this bill….”

The Conservatives

Senator Rand Paul of Kentucky never saw anything except the military and police to be the proper subject for government. Senator Ted Cruz of Texas wants outright repeal of Obamacare and lower premiums. Likewise for Senator Mike Lee of Utah.

Vicious to the Core

Here we have a bill that is designed to throw millions of people out of the healthcare system, give the rich a huge tax break, allow doctors, hospitals, insurance and drug companies to continue to set prices and make huge profits while delivering lousy healthcare to only part of the population.It throughs the definition of basic healthcare into the free for all of the mostly Republican dominated state legislatures. This bill continues the decades long assault by the Republican Party on women. Beyond the perpetual war against women’s right to choose the bill defunds Planned Parenthood entirely. Even the recent upsurge in opioid addiction among white people gets the short end of the dollar. 

Despite the outrages of this bill (and its brethren bill in the House),  the so-called moderates are just complaining at the edges. No one in the Republican Party is talking about how to solve our healthcare disaster. The Republican Party is not thinking of how to improve healthcare at all. They are fulfilling the imperatives of their anti-government, pro-rich program. While the rest of the developed countries in the word devote 8-10% of the economic output to healthcare we spend 19%. While the rest of the developed world manages to provide healthcare to every single person with top flight results our healthcare system ranks 48th in longevity and 54th in infant mortality. Near Third World results.

None of this outrages the vicious Republicans. They hate poor and middle class people, they hate black and brown people, they hate government, they love to make the rich richer. That is the essence of the Republican Party.

Brandon Weber, new to me but clearly troubled by similar incongruities, offers up the following comparison with the UK health system:

 

Vicious Republicans Not Trump Are The Problem

With today’s release of the Senate’s version of the Republican healthcare bill we see clearly that the Republican Party is a vicious, immoral pack of angry white people – mostly men it would appear from the faces representing the party in the media (see below). No matter how you slice up this legislation it says clearly that Republicans want to punish poor and middle class people for their slovenly, lazy, unhealthy lifestyles, and reward the wealthy with a large tax holiday. The healthcare industry gets to continue charging outrageously high prices while providing last in the pack healthcare outcomes. 

Trump is a side-show

The problem is the Republican Party bought and sold by the wealthy and corporations. The Republicans are busy destroying families through their attacks on healthcare, education, family income, and government protections. The Republicans are busy mouthing talk about job creation while doing nothing to create jobs, just more rhetoric about job creators and government regulations. The Republicans are busy doing nothing to assure that a person working a full-time job can achieve a livable standard of living. The Republicans are busy destroying the environment through their actions internationally and at the EPA. The Republicans are busy destroying women’s lives through their attacks on reproductive rights and women’s healthcare. The Republicans are busy encouraging white supremacists and racists in general through their endless pandering about immigration and Muslims. The Republicans are busy destroying the very fabric of our society by completely failing to maintain our infrastructure and decrying any action by government at any level to invest in our common future and protect us from the attacks by corporations on our health and well-being.

Meanwhile the Democratic Party is still dominated by the same old people and the same old rhetoric. They need to declare war on the ruling class and its Republican Party. There should be no more talk about pleasant bipartisan legislative efforts.

Forget about Trump!

We need to defeat the Republican Party and take back the country from the wealthy and corporations.

Slavery in Hudson and nearby – continued

My earlier post on this topic was picked up by Gossips of Rivertown. That brought a reference from David Marston to a new source: Radical Cartography where the results of the 1790 Census (the first census) provided further data on slavery in our region and elsewhere. Here are a few examples. In 1790:

  • Hudson – total population of 2,584 with 2,364 free whites, 27 free non-white, and 193 slaves – 7% of the population.
  • Kinderhook – total population of 4,666 with 4,027 free whites, 6 free non-whites and 638 slaves – 14% of the population.
  • Rhinebeck – total population of 3,649 with 3,175 free whites, 66 free non-white and 421 slaves – 11% of the population.
  • Catskill – total population 1,885 with 1,667 free whites, 8 free non-white and 365 slaves – 15% of the population.

It is clear that though slavery in the North was not the dominant economic engine that was true of the South, slavery was present and visible on a day-to-day basis.

Click on image to go to Radical Cartography and the interactive map.

Slavery in Hudson and Columbia Cty NY

Students presenting their work at HAL.

It is doubtless a fact that most Northerners, including the writer, think that slavery in America was a Southern problem. In the North slavery was an occasional institution, or so we think.

A week ago on Thursday 6/8/17 I attended a program at the library, “Abolition and Women’s Rights in Local History” presented by the students of Hudson Community Schools’ Writing Center at the Hudson High School. More about this project here.

“James W. C. Pennington” by Cecille Ruiz – click to see full size image

The bulk of the program revolved around presentations by the students of their research and creative projects about slavery, abolitionists and women’s rights activists of the 1830s-1850s in upstate NY. The word and image projects are on display in the library now.

Slavery in Hudson and Columbia County

But, I want to focus on just one aspect here. The program opened with readings of notices of runaways slaves from the Hudson River Valley. Many were notices from slave owners in Hudson and Columbia County dating roughly from 1795 to 1840. The source of these notices is In Defiance: runaways from slavery in New York’s Hudson River Valley, 1735-1831 ((Stessin-Cohn, Susan, and Ashley Hurlburt-Biagini. In Defiance: Runaways from Slavery in New York’s Hudson River Valley, 1735-1831, 2016.))  It is available in the library.

One hint about the deep history of slavery in our region is the fact that over 50% of the runaways spoke both Dutch and English.1  This is clearly an indication that they lived here long enough to learn two languages.

Here are a few samples from the book: (click on images for full size)

 

  1. p324. Stessin-Cohn, Susan, and Ashley Hurlburt-Biagini. In Defiance: Runaways from Slavery in New York’s Hudson River Valley, 1735-1831, 2016. []

Why Are There 16 Producers on House of Cards?

OK you Hollywood moguls and wannabes, what does a producer do? What do all of the variants do? Executive Producer, Associate Producer, Managing Producer, Supervising Producer, Co-Executive Producer?? How do they stay out of each other’s way?? How much are they paid, salary and residuals?? Should this be my next career stop??

Trump’s Innovations in Governing – the cabinet meeting

…….. at the Cabinet meeting. Thanks to CNN.

Just when you might be thinking that Trump should be paying attention to the burgeoning scandals and corruption that surround him; perhaps today he might be thinking about his next Twitter storm; how he might respond to the forthcoming lawsuits from folks in DC and Maryland claiming that he is violating the emoluments clause in the constitution.

No, he surprises us with another innovation in governing. He has turned his latest Cabinet meeting into a round of campaign rhetoric and sycophantic adulation and lies. Listen to the 11 minute video from this epic meeting on CNN, “Trump Meets with Cabinet, including Sessions“. Smacks of Trump on the Celebrity Apprentice.

 

The Environment, Trump, Koch Brothers & Big Money

Trump’s recent announcement that he is leaving the Paris Climate Accord and his ongoing gutting of the Environmental Protection Agency should come as no surprise given his billionaire class Cabinet and advisers.  Now it is clear that the Koch brothers have been at work. They are notorious for their Libertarianism, election buying and ownership of huge coal mining corporations. 

Today (6/5/2017) on the New Yorker magazine website Jane Mayer wrote in her article, “IN THE WITHDRAWAL FROM THE PARIS CLIMATE AGREEMENT, THE KOCH BROTHERS’ CAMPAIGN BECOMES OVERT” of the now publicly visible campaign by the Koch brothers and many others to make their decade’s long campaign to deny climate change bear new fruit in public policy. More evidence that the plutocrats are now so secure in their control over our politics and the government that they can come out of the shadows and rule directly through Trump.

BTW – Jane Mayer spent 5 years investigating big money and particularly the Koch brothers. The resulting book almost reads like a cloak and dagger mystery excepting for the very real people and money at play: DARK MONEY: The Hidden History of the Billionaires Behind the Rise of the Radical Right by Jane Mayer (Doubleday NY 2016) – reviewed in the NYTimes 1/19/2016 by Alan Ehrenhalt.