Potpourri

How come op-ed writers are so bad? The one I am most likely to find interesting is David Brooks, but today's column is a stinker. He compares Obama's position to Lincoln and Churchill. But the Afghan war is not the Civil War or WWII. Why should we care about places in the Stan where almost nobody lives? Why should we want to be their police force?

Ezra has more good columns today on health care. In one he questions how cost-effective the public option is going to be. It seems pretty clear that premiums are going to rise and that some people who don't have care now in order to get insurance are going to have a huge bill. Of course, the penalty for not getting coverage is miniscule. But maybe that is a good thing. If they really can't get coverage, now they will be able to. But since they will tend to be the most in need of health care, they will be more expensive. Either the premiums are going to be high or taxpayers are going to be stuck with more expenses that are currently imagined.

I'm not a therapist, a buddhist or a philosopher, so this may be really simple-minded. But isn't a feature of all three that they require detachment from your emotions or beliefs to work? Of course, you have to feel the emotions first so that you know what they are. But then you can detach from them instead of identifying with them. Same with beliefs. We can carry around unexamined beliefs that determine our opinions, including what the relevant facts are.

Justice Part 3

Rawls idea that we would choose equal liberties and to be treated with respect by government of course assumes that we would choose to have a government. Remember, we are trying to envision what kind of society we would create if we did not know what our situation was...our talents, starting points, etc. I am going to bypass this point, but any anarchists out there might want to challenge this. It seems pretty obvious to me that we would want to have the essentials of any sort of decent life. If we were unlucky in health and could not work, we would want to have at least the basics covered by those luckier. The basics would at least include food and shelter. What if we were too poor to afford necessary medical care? That seems like an essential. Well, our government provides food stamps, housing assistance, Medicare, Medicaid and Social Security disabilty benefits for those who are poor, old or unlucky. Another question is to what extent should we provide these services. With food, the answer is clearer. People need a certain caloric intake to be able to function. How about medical care? As a friend pointed out to me some time ago, we really haven't been addressing what is the basic level of medical care that should be provided. In fact, beginning to do so seems to leads to screaming from various people about rationing. I understand that it is rational for seniors to be worried about this issue, but we cannot afford to give everyone every treatment they want. But what about all reasonable and necessary treatment?

Justice and Contracts

The idea that there is a sort of social contract that defines our rights and duties in a society is an old one, tracing back to at least John Locke. But, of course, none of us has actually agreed to such a contract, although immigrants must agree to obey the law in order to become citizens. Locke came up with the idea of tacit consent, if we enjoy the benefits of government we consent to the law and are bound by it. In contract law, not all contracts are enforceable. For instance, to be a contract there must be consideration (something given in exchange for a promise). Likewise, the mere fact that you and I make a deal does not make it fair. In Sandel’s words, the contract must respect autonomy and reciprocity; it must be voluntary and mutually beneficial. He uses the example of an elderly woman who agreed to a contract to pay a contractor $50,000 to fix a leaky toilet (supposedly a true story). Enforceable? Morally binding?

But a contract between parties who were equal in power and knowledge and equally situated would be a perfect contract. The terms of such a contract would be just by virtue of their agreement alone. This explains why Rawl’s idea of the original position behind the veil of ignorance is so powerful. It is the pure form of an actual contract.

Rawls proposes that the first principle that would be agreed upon would be a principle of equal liberties for all citizens, including the right to liberty of conscience and liberty of thought. We wouldn’t want to be oppressed, even if it turned out that we were in the minority. We want to pursue our ends and be treated with respect because we are human beings. What other principles would we choose?

As an aside, thinking about justice and contracts is part of what my friend objected to about changing the terms of the agreement later, such as if I work and pay Social Security taxes based on the promise that I will be taken care of when I retire, then it is unfair if the majority change the rules after I have made the contributions asked of me. The fact that there is not an actual contract doesn’t matter. What matters is our understandings when we made the deal.

Of course, any employer can fire anybody for any reason with no recompense if there is no employment contract. And in this country any remedy for such a breach of contract is not going to be you keeping your job. In companies that haven’t paid back their TARP loans, they are partly employees of the taxpayers. Why can’t our representative lower their salaries or prevent outrageous bonuses? We never had the understanding that these guys could pay themselves whatever they want. So I think the moral argument still fails here. But it also shows why this is an inadequate response even to bank pay. The guys at Goldman Sachs who have paid their TARP money back can give themselves whatever bonuses they want, subject to the wishes of the shareholders, which appear to be inadequately protected by the board of directors.

Justice

I am reading Michael Sandel's book Justice and last night Tita asked me about it and said I should talk about it on the blog. So here goes. Sandel's class on justice draws 1000 students at Harvard each time it is taught and this book is easily understandable, although like all good philosophy it is not casual reading. One problem in deciding what our societal institutions should do is that we reason from our particular situations. If I come from a rich family and am healthy I will look at the world differently than someone who is born poor with a disability. John Rawls, one the most famous modern philosophers, came up with a way to think about the issue more objectively. He uses the idea of a social contract but with some twists. Imagine that you make judgments behind a veil of ignorance, that is you do not know what talents you have, what your social standing is, etc. You could end up on either end of many spectrums that do not result from anything you are responsible for, but are just a matter of luck. How would you have our institutions function?

More on health care costs

As much as I loved the discussion of costs with Atul Gawande on the New England Journal of Medicine site that I posted on Facebook, Ezra Klein asks some very good questions after his discussions with the head of Kaiser Permanente. Why haven't they taken over the market? The short answer is employer-based health care. Before you get too excited by the idea of single payer government health care, consider that Canada spends a greater per cent of GDP on health care. Do they have better care? He also notes that we pay much more for a unit of service than people do in Europe, which doesn't have a Canada-type system. For instance, a CT scan there costs a couple hundred dollars and here it costs over $15,000. Why? Below is the abstract for a paper dealing with this issue, which you can access through Ezra.

ABSTRACT: This paper uses the latest data from the Organization for Economic Cooperation
and Development (OECD) to compare the health systems of the thirty member countries
in 2000. Total health spending—the distribution of public and private health spending
in the OECD countries—is presented and discussed. U.S. public spending as a percentage
of GDP (5.8 percent) is virtually identical to public spending in the United Kingdom, Italy,
and Japan (5.9 percent each) and not much smaller than in Canada (6.5 percent). The paper
also compares pharmaceutical spending, health system capacity, and use of medical
services. The data show that the United States spends more on health care than any other
country. However, on most measures of health services use, the United States is below the
OECD median. These facts suggest that the difference in spending is caused mostly by
higher prices for health care goods and services in the United States.

The Future

What will the world be like in 50 years? Here is an ongoing fun discussion at Marginal Revolution...a good example of why Tyler Cowen is my favorite blogger. As another blogger remarked, Tyler not only has an opinion of everything, he has thought about everything. Of course, not true, but still...

As many of you know, I am a huge Nassim Taleb fan. Check out his website at www.fooledbyrandomness.com/ There is a discussion there with Daniel Kahneman that I have to watch sometime. Apparently Nassim thinks we ought to nationalize the banks.

What do I think? I think we are pretty clueless because of the existence of Black Swans. Maybe the Great Disruption will be December 21, 2012. Whatever the black swans are, do not assume they will all be bad. Who in 1960 predicted the internet?

Executive pay cuts (and Social Security)

A good friend writes:
The president's comments on executive pay. While it seems true that shareholders should have a voice in how their "employees" are paid and most shareholders would agree that they are being decidedly overpaid, there is a problem with the government limiting pay in this particular event. The government made a contract with the banks and car companies (which I did not and do not agree that they should have). Then after agreeing to the terms of that deal comes back and unilaterally changes the terms apparently for political purposes IE: the taxpayers deserve better. A notion that should have occurred to our politicians long before now but still flies in the face of contract law. Done properly, it should have been part of the original contract's terms not an afterthought. Worse, the decision to do this is not being made by Congress but by appointees of the current administration. By the way, this is not entirely without precedent as they did it to social security recipients by adding a tax to their benefits and are trying to be more egregious by trying to means test social security benefits. That would mean that in spite of paying premiums for forty plus years some bureaucrat will just decide that you already have enough retirement funds so you won't need any from your social security "insurance" fund.
http://online.wsj.com/video/obama-comments-on-executive-pay-caps/909115ED-8E6A-4195-B7D5-75363F247869..html

Was there a contract between the government and the banks? I don’t know. If so, you may have a point. I doubt that there was time to draw up contracts when Paulsen began bailing out the banks. The meltdown was occurring.

Let me address Social Security first, where there clearly is no such contract. Retirees’ benefits are paid for by current workers. It is an ongoing pay-as-you-go system that is already hugely welfare-oriented. That is, those who put in the most get a far lower return than those who put in little. Those who first got benefits got an even better deal; they didn’t pay in anything, which leads some to call it a ponzi scheme. However, I think Social Security has been a great idea. I think that those who can work ought to pay for our elders when they get old. The problem becomes that people live longer now and as boomers retire there are going to be fewer workers paying for more retirees. You have to raise the retirement age, lower the benefits or raise the FICA taxes. Geezers like me might think it is unfair to do either of the first two, but I imagine younger workers would think it is unfair to raise the taxes they pay (for a system they doubt will continue to exist because we can’t face our problems as a society).

My biggest beef about the pay cuts is that they will do little to change the incentives on Wall Street. John Cassidy had a good piece called Rational Irrationality about this. And I believe Henry Blodgett originally made the distinction between the risky deals that were being made and the career risk of a trader who wasn’t in on the action. So if people were being rational and taking these huge risks that almost melted down the economy and made the current recession much worse, then something needs to be done about the financial system from a regulatory or structural point of view. Does banker pay even matter?

A panel of business bigshots at the Aspen Festival this last year had some interesting thoughts on the short-term thinking that has become too common in the boardroom. Below is Steve Pearlstein’s take on its history (the link to the Aspen Festival report is here, too).

The roots of this short-termism go back to the 1980s, with the advent of hostile takeovers mounted by activist investors. This newly competitive "market for corporate control" promised to reinvigorate corporate America by replacing entrenched, mediocre managers with those who could boost profits and share prices. In theory, the focus was on increasing shareholder value; in practice, it turned out to mean delivering quarterly results that predictably rose by double digits to satisfy increasingly demanding institutional investors. Executives who delivered on those expectations were rewarded with increasingly generous pay-for-performance schemes.
As fund managers grew more demanding of the short-term performance of corporate executives, investors became more demanding of the short-term performance of fund managers. To deliver better returns, managers responded by moving money from bonds and blue-chip stocks to alternative investments -- real estate, commodities, hedge funds and private equity funds -- where there was more risk, higher leverage and bigger fees. In time, the managers of these alternative investment vehicles began looking for new strategies to improve their results, and Wall Street was only too willing to accommodate with a dizzying new array of products.

I will leave discussion about what should be done about Wall Street for another day as I barely have a clue other than making derivatives and hedge funds more transparent (and current proposed legislation seems be giving companies huge loopholes). Even if there was no contract, you may have a moral point. But it gets way harder to make. In the first place, the bankers had the information. Maybe the most critical thing I can say about the pay cuts is that many of the people who got the cuts have left and the rest just may go somewhere else. If the American public thinks these cuts are really going to solve any problems, then maybe that just shows how uninformed we are.

Continuation Day

I am having a fine anniversary of birthday, or as one of my buddhist friends says, continuation day. Tita took me out for dinner last night at a terrific restaurant www.log-haven.com and has something going in the crockpot while she is at work. I had curried pecan cauliflower soup and bison rib-eye steak. We have a snowstorm coming in early tomorrow so I got all the deck furniture stored in the garage yesterday. I couldn't stand watching the end of the Bears game they were so bad so I decided to accomplish something outside instead. Saturday we got in some golf but quit after nine holes after we got hailed on. Don't know how many days we have left of golf. One nice thing about this time of year is that Tita really gets into cooking. She has already planned what we are having Tuesday!! This is a new first in planning ahead meals. Usually we just go with the flow day by day (one of the traits I did not pick up from my dad). But she loves to cook and I love to eat...a win-win situation. Every time I buy her a new cookbook I get rewarded many times over. She says that when she retires she is going to become a gourmet chef and take classes. I don't think that this is just a means to get out of working anymore but you never know. Luckily, she also likes her job.

I have decided that I am going to be even lazier than usual today. My boss says I have to go in for a few minutes this afternoon but I don't have much to do (other than a brief that isn't due for four weeks). I might even go out and use the raincheck (or hailcheck) to finish my round of golf. Tom and I were chatting so much that I didn't bother to keep score, but then I know I didn't really do well enough for it to matter, so I didn't go back and figure it out.

I have been wasting an inordinate amount of time trolling the internet and now have a bunch of blogs I read. I really am going to start reading books again and even finished one on the misuse and abuse of history that I mentioned here earlier. I am actually reading a philosophy book called Justice by Michael Sandel, a famous philosopher. It is very clearly written and so far takes me through some of my own adventures in ethics and political philosophy. Also have a book called The Good Soldiers about the lives of a unit in Iraq that has gotten great reviews. Of course, I have many other unread books lying around, too.

We had a wonderful time in San Francisco and I learned some more very good stuff on VA law and ERISA. Looking forward to helping vets but not so much dealing more with insurance companies. We had incredible dinners every night and hung out for two days with my old friends Vern and Jennifer K. Pesces, Campton Place and R & C Lounge in Chinatown stand out. They had a car so we took a drive to Muir Woods north of the city on Saturday missing the turnoff and taking a scenic drive down highway one before we figured out we were lost after ending up in a hippie village called Bolinas. Luckily, we were able to find a gas station and then found Muir Woods where we did a great hike amongst the 250 foot redwoods and other beautiful plantlife.

Every day is a coninuation day so if you want to goof off, go ahead. You are adults and don't need permission.

Cancer

This article in today's paper is incredibly moving. I don't want to bias anybody's reaction, so I am not going to comment other than to say it shows why "it is what it is" is my favorite quote on my Facebook page. And why today is a great day.

Afghan Policy

This New York Times article pointed out just how blatantly corrupt the Afghan government is, from top to bottom. Nicholas Kristof points out that support for the Taliban is often in response to this corruption and that the country is deeply divided ethnically. Steve Coll makes the point that we need to think about what our goals are in Afghanistan. In his mind, they are preventing the Taliban from taking over again and getting rid of Al Qaeda. The former is unlikely and more troops in Afghanistan are largely irrelevant since Al Qaeda is in Pakistan and elswhere. Coll also makes the point that counterinsurgency measures do not work unless there is local government cooperation. I think that any increase in troops to help Karzai police his country should be preceded by steps he takes to halt the corruption, which should start with the new election on November 7. The fact that there is going to be a new election is the result of Obama not doing what Dick Cheney thinks he should do. And let's get over the idea that this is a win/lose situation. That was part of the folly of the Bush position in Iraq. We can only expect incremental gains in Afghanistan and those will only happen if their government limits corruption. It is not our job to make every country better if only because it is impossible.

Insurance Companies

There seems to be an undue amount of sympathy for insurance companies these days from the right, in spite of the fact that they are exempt from antitrust laws. As a lawyer, I periodically deal with them. Workers Compensation carriers routinely deny claims when treatment gets expensive, requiring claimants to litigate. In long term disability insurance, the federal ERISA statute has preempted state law. If you appeal a denial of benefits, the first level is an appeal to the insurance carrier, and then you have to go to federal court under ERISA, which is heavily slanted in favor of the insurance companies. In medical insurance, claims are also routinely denied, forcing providers to appeal. And insurance companies work hard to get rid of those who are bigger health risks, even to the point of rescinding contracts on the basis of some minor mistake on the application. Think of all the expenses insurance companies have in working to deny claims. And all the expenses medical providers have in employing people to deal with the insurance companies, each with their own set of rules. This money seems wasted. I'm in favor of markets where they work, but this one doesn't seem to work. Joe asks why shouldn't we just have Medicare for everyone? I don't see that as a panacea, but that question deserves it's own separate post. The first question I'd ask is how that would deal with rising Medicare costs, which threaten to overwhelm the budget?

History

I just finished a wonderful little book by Margeret MacMillan called Dangerous Games; The Uses and Abuses of History. She has lots of great contemporary examples of using and misusing history, from the Chinese government's emphasis on their recent history of humiliation to promote nationalism to the oft-repeated justification of our policies by referring to the appeasement of Hitler or other bad guys (you can see a version now in right-wing attitudes about Afghan policy). At the end of the book she asks the question what can history teach us? Some quotes: "Since history relies on a skeptical frame of mind, whether toward evidence or comprehensive explanations, it can also inculcate a healthy propensity to question our leaders." It can teach us humility. "One of history's most useful tasks is to bring home to us how keenly, honestly and painfully, past generations pursued aims that now seem to us wrong or disgraceful." "History also encourages people in the present to reflect on themselves." "Bad history ignores...nuances in favor of tales that belong to morality plays but do not help us to consider the past in all its complexity." She also has a lot of interesting things to say about nationalism, a state of mind that has historically only recently existed, and how leaders use this impulse of group solidarity.

Ideas on health care costs

Here Tim Harford argues for catastrophic coverage and health care savings accounts. This argument appears in a longer version in one of his excellent books. Ezra Klein notes (yesterday's blog at 11:55 a.m.) some troubling findings for those who believe that exchanges which allow consumer choice will lower premium costs. Tyler Cowen makes a good point about the availability of health care outcomes (as Atul Gawande has done). These raise some questions for me. Suppose we gave a tax break for medical savings accounts and let people choose only catastrophic coverage on the exchanges. What are unintended consequences? Why hasn't competition between insurers worked? As to the former, would this not affect the power of the mandate that everyone be covered? On the other hand, doesn't the problem of those free-riding on the current health care system really come in when they have a catastrophe? Regarding competition between insurers, isn't the place where we are likely to see the most gains competition between providers? Giving people a choice of plans is good in itself. And further, shouldn't we expect health care costs to increase? We not only have new expensive technology, but more treatments. For instance, 100 years ago my exaccerbation of ulcerative colitis probably would have led to death, which is much cheaper than treatment. 30 years ago they would have just taken the colon out right away, which also would have been more likely to result in death. Four years ago, when I got sick, they tried to treat me with drugs for quite some time, allowing me to at least improve enough to lessen the risks of surgery. Some of these drugs were expensive. For instance, Remicaid was $4000 a dose. Because we have more possible treatments for more medical conditions, costs rise. This leads me to a point a friend made some time ago: the discussion really needs to get to what the basic level of care we are going to give those who get treatment relatively free of charge, like the old or the poor. We cannot afford to pay for everything they may want at any given time. As it is, Medicare and Medicaid are going to swallow up the federal budget.

Partisan self-deception

Apparently there has been a lot of discussion on the right about the falling dollar. Megan and Tyler both have interesting things to say about why most of it is silly from an economist's perspecitve. But Ezra has a good post about the underlying dynamics, and cites a very interesting study that that shows that the more "informed" voters believed more things that weren't true but fit their preexisting biases. This should be a very interesting finding. These discussions also make me wonder how anyone can be so silly as to want to peg the dollar to gold again. Have any of these people studied the depression? I would suggest The Lords of Finance by Liaquat Ahamed as a starter. And how about Ron Paul's book about getting rid of the Fed. Oh my goodness, where do these people get their silly ideas from?

The Mayo Clinic

Along with Obama, I have been impressed by the quality of care at the Mayo Clinic and how much cheaper they are than many institutions. And so it is easy to slide into the view that we should model health care in a similar way. Here is a good article on why the issue is more complicated (also see the very good comments). Complicated problems often do not have simple solutions. I also recently had a client who got shoddy service at the Scottsdale Mayo. I found striking errors in the report on my client's condition.

Assorted links 10-20-09

1. Steve Coll with some wise thinking on Afghan policy. The simplemindedness of the debate between those who support McChrystal's advocation of more troops vs. pulling out is astounding. Looks like Obama is getting it right again.

2. Mark Thoma on Bernanke's comments about the meltdown. It seems quite clear to me that we need a better regulatory structure in the financial markets. We are missing the opportunity to do something right.

3. Ezra Klein on the right's new disingenuous bashing of Obama's health care reform on costs. This also shows the weakness of trying to limit costs by simply giving everyone Medicare and have the government control costs. The actual measures will by susceptible to political infighting. If there is going to be a central cost determiner, it has to be a separate agency from Congress, like the Fed. But I still prefer a solution that uses national health care exchanges to offer individuals choice and to encourage price competition amongst providers and insurance companies.

From SF

I'm looking out over the San Francisco Bay at mostly fog. I had intended to go to the general session today at the NOSSCR conference. However, do I really want to listen to beauracrats tell me about all the great things that are supposed to be coming in the Social Security Administration? The short answer is no, so I'm trolling blogs. There are swirling debates on whether insurance companies should have an anti-trust exemption and Afghan policy. Lots of health-care stuff from Ezra. Mark Thoma has a series on inequality. Here is a great article from Megan on GDP, statistics and measuring well-being. Highly recommended.

Assorted links 10-13-09

1. John Cassidy on the meltdown.

2. Felix Salmon on John Thain.

3. Afghan policy.

4. Supply side economics debate.

Human Folly

One of the biggest impressions I have from reading a lot of history that is not anachronistic (reading the present into the past) is that how people have seldom been able to predict the future. For instance, most people at the time of WWI thought it would be over in 6 months. But we humans like our narratives. We are captivated by stories, imposing patterns on reality with a narrative structure, often involving of good and evil. And since we suffer from confirmation bias (we look for evidence that confirms our theories/stories rather than the scientific method of testing a hypothesis to try to disconfirm it), we plod along believing that our knowledge is greater than it acutally is. I am not advocating a radical skepticism, but merely promoting some humility. I like the way buddhists approach this fact. You do the best you can where you can do some good. But don't take your theories too seriously.

Health Care Costs

I've been meaning to write about this for some time, but I keep changing my mind. It is complicated, but I'm now at the point that I realize that it will a long time, if ever, before I really understand the issues. There are a number of good pieces at www.fresh-thinking.org. Here is one by Victor Fuchs. A long time ago, Atul Gawande's article convinced me the overutilization caused mostly by fees for services payment systems was the large elephant in the room. But there are lots of causes of overuse. Consumers don't feel the effects of choices. In normal markets demand is modulated by cost. That isn't the case here. Advertising by big pharma causes higher costs, among other factors. Also, we have to take into account administrative costs imposed by private insurers trying to keep sick people off the rolls, as well as administrative costs due to our very complicated payment systems. Think of all the people a doctor must employ in order to get payment for services. We also pay doctors more than in other developed countries. We don't use information technology as well as others. We generally fail to evaluate how our health care works. New technologies drive up costs. Then there are the effects of malpractice lawsuits. And finally, the wealthier you are, the more rational is it to spend for health care. Like food and housing, health care can make a fundamental difference in your life. The marginal utility of any other purchases pale in comparison.

Ronald Reagan

In response to an op-ed piece by Paul Krugman, Megan McArdle challenges one of the current left wing views that Ronald Reagan's presidency is responsible for much of the problems of today. Of course, many on the right now glorify Reagan as the greatest conservative and classify the Bushes in less than flattering terms. I question this whole focus on Reagan as very short-term historical thinking. So short-term that it overlooks what happened in the late 60's and 70's, when we had the craziness of drafting young people to fight a stupid war, riots in black areas of cities and a long period of malaise typified by gas lines and stagflation and high interest rates. Not to mention disco, clearly the end of civilization as we know it. Volker conquered stagflation by inducing a recession, the Soviet Union collapsed and people's lives in the 80's were generally much better (as people's lives have generally improved over time). Of course, the new left narrative now discounts this as phoney gains to be paid for by the difficulties we have now. I am dubious of both these narratives that place the major causal factors of current conditions in the 1980's.

Ezra on Health Care Costs

I find that Ezra Klein has more interesting things to say on health care than anybody. However, the most interesting points in this discussion are in the comments. These also show the dangers of reasoning from graphs or statistics. The arguments often look impressive but are deeply flawed. Ezra wrote a better column in the Washington Post September 20. The URL is so ridculously long that you will have to look it up yourself (I did post it on my facebook page awhile ago). Does anybody know how to cut and paste an URL onto a blog page?

The Public Option

Every time I see this mentioned, and it seems to be a hot topic on the right and the left, I want to ask what do you mean? The public option that has been proposed so far is limited to people who cannot get coverage. Varying versions have it paying Medicare rates or bargaining like insurance companies do. If co-ops or some other plan will provide coverage for these people, why does it matter if the government does it directly? The biggest problem I see with the whole approach we have so far is that it leaves so much of the current system intact. But it also appears that even getting this little bit done is difficult. Eliminating preexisting conditions and recission of contracts in itself will do much good. Sometimes when I ask the question, people say Medicare for everyone, Medicare Part E if you will. Private insurance will still be around to cover stuff Medicare doesn't. But other countries manage quite well by requiring insurance companies to offer not-for-profit basic plans. And people choose which plan they want. In Germany, these plans also cover the aged. There is no Medicare. So why is a public option so important, positively or negatively?

Quality of health care

One of the "facts" that has been bandied about is that the U.S. is ranked 37th in health care in the world by the World Health Organization (WHO). This was a study done in 2000. However, this is not a true measure of the quality of health care in a country. It takes into account the distribution of health care and responsiveness (see here). It also doesn't take in other factors that affect longevity. And even longevity is not a careful enough item; we really are concerned about quality lives. I suspect that much of the U.S. rank is due to the fact that so many people do not have access to health care in this country. There seems to be consensus that we have the best physician training and the best from around the world come here for training. As in any profession, some doctors are better than others, but overall I'll bet we have the best. And we have the best technology available. Still, there are areas for improvement. Atul Gawande has written about how the secrecy of results in hospital care has thwarted improvements. Some of the comparative effectivenss studies could address this as well as cost. And certainly France and Germany, where citizens have their entire history digitized on their health care card, provide a better system of record-keeping. If you want a very different slant on the issue, check out a recent article in The Atlantic. Rating quality is a complicated issue and I'm not expert. But I think the issue of health care costs is even more complicated.

Tony Judt on Russia/EU

Here is an interview with Tony Judt, one of my favorite historians on Eastern Europe, the EU and Russia. Since this was posted, Ireland did approve the Lisbon Treaty. It seems to me like the Bush administration foolishly furthered these Eastern Europe dreams when they should have promoting the EU. This article also helps one understand Russia.

Bloggers and David Brooks

David Brooks' recent column in the New York Times has been generating a lot of dicussion in the blogger world. Here is an excellent discussion, although the commentary devolves in the end to arguing about the "boomer generation." The big issue is how to understand the differences between the culture after WWII and now. Brooks seems to be buying into the nostalgia argument; that things were so much better before and we have fallen (sounds like Adam and Eve, doesn't it?). So many on the right and left make similar arguments. This is also an interesting incident of why the blogging world is so much more interesting and complex than the op-ed world. The only economist I know who both blogs and op-eds, Paul Krugman, is way more interesting and less dumbed-down in his blog.

Health Reform Issues

Now that I have a comment and a follower, I am truly inspired. It seems to me that we have three broad issues in health care reform: quality, access and cost. The access issue seems to me to be about all those that cannot afford health care and the limited number of choices we have (our employer sets the menu for our options). We compare badly with other wealthy democracies here. According to TR Reid in The Healing of America there are four kinds of health care systems. Poor countries have an out-of-pocket system. You pay cash. In the British system, the government pays for everything and owns the hospitals. In Canada (our Medicare system is modelled on and named after theirs), you have a single payer but private providers. And then in the Beveridge systems (France, Japan, etc.) based originally on the German system you have a number of different combinations of private and public. Here are articles about the Swiss and German systems.

The future of health care

Two articles in the Salt Lake Tribue today struck me as signs of the future. In the first, here, it shows how complicated the patchwork of programs is for children with working parents who cannot afford insurance. The second shows how genetic information will become a part of health care in the future. This will provide insurers with further reasons to deny coverage. I think these show that we need a universal fix, i.e. the same basic coverage for everybody. And if it continues to be based on an employer model, what is to stop employers from discriminating on the basis of health so that their premiums will not go up?