Five Fundamental Flaws of Healthcare and Reform

June 29, 2012

Here they are:

  1. Over the past 20 years in the US healthcare as been treated as synonymous with health insurance coverage. That is to say the main push from both Republicans and Democrats has been to increase insurance coverage to all Americans.  The problem, as most of us have horrifyingly found at a one point or another, is that health insurance doesn’t always equate to good or quality care.  At times it doesn’t even equate to care at all.  Haggling with your insurance provider over what is covered and how much after the fact has become a nightmare of paperwork that you store in a box somewhere.  This most recent attempt at reformation (Obamacare or the ACA) falls into this same problem.  Again, the fix isn’t for healthcare, it’s for health insurance.  Now we’re all forced in some form or another to have health insurance.  Fantastic, at least we’ll all share the same headaches.  The problem for many Americans is this won’t solve their problems.  While pre-existing conditions can’t be denied insurance, that doesn’t mean they have to cover and treat them well.  It’s still the same old insurance that treated you like crap before.
  2. No changes are ever made to healthcare supply.  There are many levels of this from RN’s to PA’s to MD’s.  But in this country we have a significant shortage of trained medical professionals.  That problem just got worse.  Not to come off as “uncaring” but from a strictly numbers point of view, we just expanded coverage to many people who were kept out of the system.  The problem is we didn’t change the size of the system to add more trained medical professionals.  More demand, same supply, prices go up.  Now you might be inclined to point out that in free markets this gets remedied by pushing more professionals into the field as wages are alluring.  Let’s take practicing MD’s for an example.  Something you may not know is that in most states to practice as an MD after you graduate medical school you need to have completed residency training.  Sounds simple, sign them up.  The problem is that >95% of residency funding comes from the US Federal government in Medicare aid to the hospitals.  And currently that funding is so shorted that we have more people with MD’s looking for residency positions every year than we have residency positions available.  Do you think this was changed with the implementation of the new healthcare bill?  Of course not, let’s not be ridiculous.
  3. Healthcare costs. Healthcare is expensive, but in the US, it’s exceptionally expensive.  The issue in point 2 is one problem.  But there are many layers.  Some of these layers were attempted to be remedied in the recent bill (e-files, shared information, etc.) but in actuality the large gorillas in the room went predominantly untouched.  If you’ve gone to a hospital in the recent term you’d recognize that your radiologist probably went to a pretty new machine and may have even mentioned their new equipment.  Why are we continually paying for expensive upgrades to medical equipment that gets shuffled into our bills in some form or another?  Part of that is medical malpractice insurance, which is itself expensive and driving up your bill.  But it also causes hospitals and physicians to safe guard against making a “preventable mistake”.  They need the highest resolution image possible so they don’t make any sort of mistake or get hammered in a lawsuit for missing something (even if they don’t get sued, they have to take the safeguard).  Things like this drive cost up.  I get it, mistakes are potentially lethal, but we seriously need medical malpractice reform that caps suits.  It’s just not realistic to go along with out it.
  4. Which brings me to the next point, Technology! I love tech, I’m a techie, I look over new innovations all the time online.  That’s awesome.  But many countries use 1950’s-1970’s tech to provide many of the same treatments we do today.  Why are lesser clinics not more common in this country for people that can’t afford care or insurance premiums?  If they can’t have a ferrari a honda won’t do?  I’m sure many of these people would be infinitely grateful to get any form of help.  Top end ferraris would still be sold to those that could afford them.  Analogy done, you get the point.
  5. Covering every condition. We can’t prevent every death, at some point we need to realize we’re human.  I’m sure many people have seen loved ones die, and I feel for them.  But let’s not turn a few rare instances into the common plight of all man.  Watching people die is always painful, and through our lifetimes we will all watch each other die.  That’s life.  But there’s something about a tragic or sudden death which pulls people to race to defend it as unfair or unnatural.  It’s not, it happens, accidents happen, rare genetic diseases happen.  Now that I’m done with the portion that will make the more sensitive readers write me off as a grade A jerk for the rest of their lives, I’m not saying we should do nothing.  But clearly this is a high risk, very expensive pool of insured people.  Rare diseases and cancers are a healthcare nightmare for everyone involved.  We need to do a better job at streamlining that treatment and finding ways to pool resources into centralized locations.  This might mean some sacrifices for patients (more shared rooms) whatever, but these rare circumstances need to be handled better.  Maybe I don’t have a solution yet (I’ll keep thinking) but the other 90% of the system cannot be shackled into dragging everyone down.  Clearly it needs to be separated into distinct systems to keep care prices down for people but treating those rare situations in more efficient manner.  Or I’m just a jerk.

President Obama’s Unemployment Problem

June 27, 2012

In 2009 when the President was settling into office one of the first bills he and the newly elected Democratic congress threw together in haste was the Recovery Act.  This $787,000,000,000 bill was aimed at providing 3 years of recovery funds to encourage job growth and rescue a declining economy.  Of course spending $787 Billion is never taken lightly in congress (by most people) and it was a hotly contested proposal.  The President had his staff draw up some projections based on their modeling of how the economy would act in the future in the presence and absence of the bill being passed. (i.e. with and without stimulus to the economy).  The bill was passed and unemployment was supposed to decline to around 6% by now.  Instead the actual unemployment rate released by the government is 8.2%.

Here is what they came up with, and I’ve included the actual unemployment rate over the same period.

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The president predicted, naturally, that stimulus (red line) would lower unemployment vs. not passing the bill (grey line).  The problem it turns out, is that the President over expressed how well the economy would act in the next few years.  The bill was passed and we should be cruising along on the red line by now.  Real unemployment (black line) shows that the President was way off, even with the stimulus bill being passed the unemployment rate stayed far above estimates for unemployment without them acting.

This is just an example of the miscalculation that has steered the President into believing all sorts of fictitious information about how the economy would perform.  In fact it marks a trend whereby the President continually takes the best estimate he can find for how the economy is doing (regardless of it’s accuracy).  When we hear about Job creation we hear about 27 months of the private sector job growth.  Now, all job growth (public and private) hasn’t been positive for 27 straight months.  And the term positive doesn’t account for population changes and graduates or those 18+ entering the labor force, job growth in that context is drastically under-performing.

Which get’s us to the point.  Instead of speeches full of rhetoric where we talk about how things are doing.  People should examine the numbers every once in a while.  Pay attention to more than just the 8.2% unemployment rate and look into what politicians are predicting and actually saying when they convince people that bills will lower unemployment numbers, will they?


Supreme Court Rejects Arizona Immigration Law SB1070 (5-3)

June 25, 2012

Today the supreme court struck down 3 of the 4 objectionable portions of Arizona’s immigration law SB1070.  The 4th portion was punted back to the local courts to determine if it should also be stricken.

Here the Supreme Court made the correct ruling.  State law cannot pre-empt Federal law no matter how bad we want the states to take charge of poorly handled Federal agencies and efforts.  Clearly Arizona overstepped its bounds and tried to take charge of a Federal immigration effort.  While we may want further action from the Federal Government the state cannot act in their place.  The issue needs to be resolved by Congress.  The Federal Government via the Constitution was granted exclusive rights to controlling immigration.    That is to say travel across borders is a Federal decision.

The ruling was right.


Job Growth for the Past 2 Years

June 22, 2012

Today it became apparent that job growth over the past two years is not only declining but has been rather sluggish.  Certainly headwinds from Europe have impact US markets, but it’s not very encouraging 4 years after a terrible recession to see things slowly decline again heading into a summer that will surely be filled with political turmoil.  However, the American people should be concerned about a contracting economy.

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Each month the US economy needs to add about 150,000 jobs to keep pace with population growth.  This means as we have more and more children we need to keep creating more and more jobs so make sure that we keep pace and don’t fall into a net negative event.  This is imperative to sustaining a healthy economy.  Here we see that over the past 2 years only a few months have even eclipsed this threshold set by economists as the baseline necessary.  Certainly this is not very encouraging.

The next question is probably what could be done.  I would recommend that the government become seriously concerned about current growth rates which have slowed down.  The Federal Reserve just this week noted that long term employment and GDP growth will probably be lower than originally anticipated.  This doesn’t mean we need to spend more money, but the government in Washington needs to start prioritizing it’s spending to both reduce the near Trillion dollars in loans we take and increase spending in vital areas that will increase productivity rather than areas we just want to spend in.