Obamacare Alternative

Posted on August 26, 2013 by alsanblog

In two separate posts (here and here) at the blog The Incidental Economist, Aaron Carroll, a determined advocate for centrally directed healthcare, is upset and frustrated with the critics of Obamacare and suggests they propose some “sensible alternatives that actually address the policy issues.”

Well, okay, that’s easy. First, a sensible alternative would embrace federalism. We speak of a healthcare “system” in this country, but there is no system. Medical care is provided in numerous geographic markets located across the country and there is no particular connection between providers operating, for example, in Pittsburgh and those operating in Lubbock, Texas. Healthcare is a local activity.

Respect for freedom and self-government would call for regulation of local activities on no higher than the state level. Yet by placing hundreds of millions of people under the thumb of a central authority, Obamacare represents movement in the wrong direction. Even the Europeans don’t go this far:  the E.U. doesn’t regulate healthcare for the citizens of France, but leaves that up to the French government (and its people).

Second, because history proves that market-based economies are superior to centrally directed and controlled economies, a sensible alternative would embrace markets and competition. This would mean aggressively enforcing the antitrust laws in all health-care markets (hospital, physician, insurer, drugs, etc.). We would rely on direct gov-ernment regulation only in those markets determined to be natural monopolies.

Third, it appears there are more hospitals and doctors per capita in European countries than in the U.S., so we may have a relative shortage of providers here, resulting in higher prices than necessary. So a sensible alternative would include steps to increase the number of hospitals and physicians (although liberals like Carroll tend to agree with this suggestion).

So here we have a start:  an alternative that revolves around the concepts of decentral-ization and competition. This would go a long way to create healthcare markets that benefit consumers in the form of lower prices and improved quality. That’s what com-petition does, and healthcare would be no exception in most of the hundreds of geo-graphic markets relating to medical care.

But don’t expect Carroll and other Obamacare supporters to acknowledge the truth about decentralization and competition. Carroll is a “competition denier” and his support of Obamacare is nothing more than support for relative stagnation and decline.

P.S.:  Achieving competitive healthcare markets would not automatically provide addi-tional insurance coverage to low-income individuals, although they would benefit from a more vibrant economy. But access is an inequality issue, not one of healthcare per se, and dealing with inequality by advocating stagnation for almost 20% of the economy is bizarre, to say the least.

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Healthcare Pricing

Posted on August 20, 2013 by alsanblog

A recent post at the blog Project Millennial outlines some of the issues relating to health-care as understood by liberals. According to the post, healthcare prices are a “total mess” because “list prices” vary immensely from provider to provider and the price of a proce-dure can vary widely at the “same provider,” depending on the payer.

Although not explicitly stated in the post, the general liberal view is that prices are too high when compared to prices in Europe. And based on the post, the favored liberal solution is government price controls, but if that’s not feasible, then a system that allows providers to collude to fix prices is a good alternative.

The idea that pricing might be restrained through competition isn’t mentioned in the post and it contains nothing that can be characterized as a call for more competition. In fact, the article goes in the opposite direction, claiming there’s a tradeoff between “free markets and cost control” in U.S. healthcare (more on this later), apparently based on liberals’  (mis)perception that government healthcare programs control costs better than private insurers.

So where do liberals go wrong about prices? First, according to Christopher Conover, a healthcare expert at Duke University, properly performed studies show that when we account for income levels, healthcare spending in the U.S. is about where we would expect it to be compared to European countries. If Conover is correct, then U.S. prices may not be too high after all, although liberal wonks insist that prices are higher even after taking income into account.

Second, liberals mistaken believe there’s a single healthcare system in the U.S., implying that healthcare is a set of interdependent parts forming an integrated whole. Rather, medical care in the U.S. is delivered in countless unrelated geographic markets across the country. Doctors, hospitals, and insurers who interact to provide medical care in Miami have no necessary connection to those who provide healthcare in Kansas City. Because demand and supply conditions may vary widely in these individual markets, we shouldn’t be surprised if prices also vary throughout the country.

Third, “list” prices are not real prices – they are simply the starting point from which pro-viders and health plans negotiate actual prices. Because list prices are phony, it makes no sense to get too worked up about their level. And it’s unlikely that actual prices, unlike list prices, will vary significantly in a genuinely competitive market, i.e., a market where alternatives exist.

Fourth, it appears that European countries have more doctors and hospitals per capita than we have here in the U.S. This suggests that we have a relative shortage of doctors and hospitals, and if true, say hello to higher prices. So increasing the supply of providers would be one obvious way to bring down healthcare prices. This may be all that’s needed, yet the Project Millennial post neglects to consider such general supply and demand conditions.

Liberals believe that government does a better job controlling costs than competitive markets, apparently because Medicare prices are lower than those in the private sector. The idea that arbitrary, government-controlled prices in Medicare just might result in higher prices in the private sector (called “cost shifting”) is denied by liberals although the theory they rely on uses unrealistic assumptions.

Any government can restrain costs simply by imposing price controls and restricting access to care. But history proves that centrally directed and controlled economies never outperform economies based on competition and markets. So a price-fixing government may be able to look good, but the look would be temporary:  in the longer run, centrally directed healthcare would only result in relative stagnation and eventual decline.

But don’t count on liberals to understand this – they are competition deniers. And that’s going to harm all of us.

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Organizing Healthcare

Posted on August 2, 2013 by alsanblog

The important question for healthcare, as is true for the economy as a whole, is how to organize and regulate healthcare. Generally, we can organize around competitive markets or through a system directed by a central authority. History proves that competition is the superior choice, yet liberal healthcare policy wonks not only refuse to acknowledge the truth about competition, but refuse to even pose the question.

For example, a recent article published by the Journal of the American Medical Assoc-iation summarized the results of a survey to determine how physicians view their respon-sibility for controlling healthcare costs. The authors of the study asked physicians to consider seventeen potential means of reducing healthcare costs, and ultimately concluded that physicians tend to place responsibility for controlling costs on others.

Aaron Carroll at the liberal blog The Determined Statist (aka The Incidental Economist) linked to the JAMA article and in his post, used the results of the study to bash physi-cians. The importance of the article, however, is not about physician attitudes; rather, it’s the fact that competition, which is the answer to controlling costs, didn’t even make  JAMA’s list of “means.” Seventeen items and competition nowhere to be found.

In another post at The Incidental Economist, Austin Frakt summarizes what he considers to be positive statements that most health economists could agree on about the econ-omics of healthcare. His list of seventeen statements (hmm, seventeen seems to be a mystical number for liberals) makes no mention of the superiority of competition. The idea that competition can control costs simply doesn’t register with the liberals at JAMA or The Incidental Economist.

And what about the youngsters? Do the over achieving grad students at Project Millennial understand the concept of competitive markets? The answer would be no, based on a series of weekly posts this summer discussing “important” concepts in health policy and health economics. There’s very little in any of the posts, including the current one on healthcare pricing, to suggest that the contributors at the blog are even vaguely aware of the concept of competition.

So liberals of all ages have gone all in for central planning instead of calling for more competitive markets, which is to say they’ve gone all in for stagnation and eventual decline. How very unfortunate for all of us, indeed.

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The Mind Of Aaron Carroll

Posted on July 13, 2013 by alsanblog

My experience after submitting a comment to a post on the liberal blog The Incidental Economist nicely illustrates the working of the liberal mind these days. The blog, which is well regarded within the media, claims to contemplate “healthcare with a focus on re-search,” and because it’s “evidence-based,” the administrators require readers who post a comment to provide citations that support “any claims that are not obviously true.”

Recently, one of TIE’s contributors, Dr. Aaron Carroll, authored a post about what he called a “ridiculously fantastic” JAMA article that compared the quality of healthcare in the U.S. to that in other countries. The article was ridiculously fantastic apparently be-cause it found U.S. healthcare substandard when compared to mostly European countries. The good doctor studies healthcare quality and it’s not unusual for him to use Europe to bash the quality of U.S. healthcare.

In my comment to the post, I suggested that social and cultural factors (i.e., factors re-sulting in behavior that’s not good for health), for which doctors and hospitals cannot be held responsible, explain the poor showing, and that when such factors are taken into account, U.S. medical care is the best. I also suggested that liberal criticism of U.S. healthcare by referencing Europe is really criticism of our government’s inability to control our lives.

Well, Carroll had a conniption over my comment (good thing he’s a doctor – he could monitor his own vital signs and prescribe a sedative, if needed). He responded with an irrelevant, sarcastic comment, and stated that this was my “last factless freebie com-ment.” No attempt to explain that my facts were incorrect or my reasoning misguided, just a threat to shut off further discussion.

In a reply to Carroll’s “factless” reference, I pointed out that TIE itself lacks factual sup-port for its political position. For example, one of the most important aspects of reform is choosing how to organize and regulate healthcare. And from reading the blog, it’s clear that TIE supports a centralized, big government approach to healthcare, yet it takes this position without any evidence whatsoever of its value.

One of the fundamental facts about social life is that decentralized economies founded on markets and competition are far superior to centrally directed economies. This is based on almost a century of “natural experiments” (including the ridiculously fantastic natural experiment still playing out on the Korean peninsula), not to mention economic theory. The superiority of competition is one of those “obvious” facts for which a citation is unnecessary.

But liberal wonks like Carroll ignore this crucial evidence and because centrally directed economies harm everyone eventually, the result is a disconnect between the wonks’ goal (presumably to help the poor) and their method of attaining the goal. After pointing all of this out, I finished my second comment by asking Carroll if he might address this dis-connect.

Alas, rather than address the issue, Carroll responded by deleting my second comment. Evidently, this is his response to obvious facts that he doesn’t like, which would be the cyber equivalent of placing his hands over his ears and chanting “LaLaLa, I Can’t Hear You.” So much for discussion and intellectual honestly.

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Lip Service From The WSJ

Posted on July 11, 2013 by alsanblog

The editors of the WSJ are quick to praise markets and competition. But when push comes to shove, when either DOJ or FTC actually challenges the anticompetitive practices of a dominant firm or combination of firms, the WSJ always comes down on the side of the dominant firm and the resulting concentration of power. The latest example being WSJ’s criticism of the government’s price-fixing case against Apple, Inc. and major e-book publishers.

When a major competitor enters the market, we might expect prices to go down, not up. But go up they did after the agreement by Apple and the publishers to fix e-book prices. The chart on page 95 of the District Court’s opinion (ruling against Apple) summarizes the price increases resulting from the collusion. But WSJ ignores this and instead clings to Apple’s dubious claim that prices declined as a result of the agreement. Yeah, that’s the ticket.

Evidently, WSJ editors don’t object to the concentration of power per se, as they would have readers believe, but only to concentrated power that doesn’t rest in private hands. The editors may think they oppose the Big Government liberal agenda, but their support of Apple’s conduct makes them liberals’ intellectual first cousins.

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What’s Left For Regressives?

Posted on July 7, 2013 by alsanblog

Flush from the gay rights victory at the Supreme Court, “progressives” are now wondering what’s left for the progressive movement. Writing in Slate magazine, for example, Barry Friedman and Dahlia Lithwick offer up a laundry list of progressive causes that they be-lieve all good progressives should pursue, now that the gay rights battle is over.

The list includes free child care for all, more spending on education, more immigration (i.e., creation of more Democratic voters), less security to combat terrorism, fewer prisons, greater economic equality, a war on carbon, freedom to smoke dope, more affirmative action (perhaps to continue forever), women’s rights (but only in the U.S  – not for women in regions controlled by real misogynists), and continued central control over voting.

F&L see progressivism as part of a forward-thinking agenda that attracts sensible people across party lines. For them, progressivism is:

just the idea that working together, often with and through government, we can make the world a better place.

It all sounds so simple and wonderful – who could possibly disagree? Yet if we unpack this definition, we find that it’s deceptive on several levels:  it not only misrepresents those who disagree with the progressive agenda, but also progressivism itself. F&L’s definition helps us see what’s wrong with the progressive movement and liberal thinking.

First, the phrase “often with and through government” implies that progressives don’t necessarily see government as the solution for everything. This is patently false. For progressives, it’s not a matter of often with respect to government – it’s a matter of always. And it’s not just government in general that mesmerizes progressives, but rather centralized government that places 315 million citizens firmly under the thumb of a single authority.

Second, F&L imply that only progressives are open to “working together” to make the world a better place. This is hardly novel – the implication recycles the same straw man that Elizabeth Warren and President Obama knocked down (“you didn’t build that”) last year to misrepresent and mock those who believe in individual initiative and success. In the real world, everybody knows that we act collectively all the time (that’s what it means to live in a society) and that we accomplish great things through collective action.

Third, F&L misrepresents those who oppose their big government agenda in yet another way:  by implying that only progressives seek to make “the world a better place.” And just as everybody understands that we act collectively all the time, everybody also wants to see a better world. Which is to say a society and economy that generates the greatest prosperity for the greatest number of people.

The real difference between progressives and their opponents is the question of how best to organize collective activity to achieve widespread prosperity. And history, not to mention economic theory, has proven that societies in which power is decentralized, e.g., based on markets, competition, and federalism, always outperform societies that concentrate power in a central authority. This is one of the most fundamental facts of social life.

Genuine progress would mean reform that creates more competitive markets (e.g., in healthcare) and encourages self-government by restricting the power of the central authority to issues that are truly national in scope, leaving local matters to the states. Unfortunately, F&L’s laundry list leans toward greater centralization of government (except in the case of smoking dope – perhaps because local rule would give them their desired result faster) and more government spending.

F&L’s call for more centralized government control and spending is effectively a call for stagnation and decline. By rejecting policies to increase competition and federalism, they are not working to make the world a “better place” that they claim progressivism is about. Because F&L are really looking backward, maybe the question should be:  what’s left for regressives?

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Ignoring The Blue Whale In The Room

Posted on June 29, 2013 by alsanblog

One of the unassailable facts of social life is that centrally directed economies never out-perform economies that organize collective activity through competitive markets. The “natural experiments” of the last century, some of which continue today (e.g., see the experiment on the Korean peninsula), easily prove the superiority of competition and markets. On the basis of this evidence a call for central planning is equivalent to a call for economic stagnation and decline.

So what do these experiments mean for healthcare in the U.S.? Well, the evidence suggests we pursue reform that creates more genuinely competitive healthcare markets. Yet, liberal healthcare policy wonks, who claim to be “empirically driven,” continue to call for centrally directed healthcare. For example, this post at The Determined Statist (aka The Incidental Economist) contains a list of seventeen statements that “most health economists would agree with about the economics of health care.” None of the seventeen “facts” cited by the blog even address the issue of competition vs. central planning.*

Never mind ignoring the elephant in the room, this is more like ignoring a blue whale in the room. Liberal wonks often compare European healthcare to that in the U.S., insisting that Europe outperforms America on both quality and prices. Could Europe be the source of liberal confusion? Perhaps the wonks reasoning is two-fold:  (a) European healthcare and economies are great and (b) healthcare in Europe is centrally directed (on the country level). So why fear centrally directed healthcare in this country? Maybe liberals even believe the European healthcare experience nullifies the natural experiments.

But is European healthcare really superior? Christopher Conover, a healthcare policy expert at Duke University, would say no. In a response to Steven Brill’s Time magazine cover article, Conover pointed out that, when properly analyzed, spending on healthcare in the U.S. is exactly where we would expect it to be, given our higher incomes, and that quality in the U.S. is higher than in Europe. Not surprisingly, liberals tend not to  link to many of Conover’s posts that contradict their worldview.

The liberal wonks not only exaggerate European results in healthcare, but they also ig-nore the general economic situation in Europe. The 25% unemployment rate in places like Greece and Spain combined with widespread stagnation elsewhere suggests that the social democracies and their welfare states are falling apart before our eyes. Apparently, even big government democracies can’t overcome the inherently destructive nature of centrally directed economies. The European experience doesn’t justify the wonk’s love of big government.

Although European healthcare doesn’t generally rely on markets and competition, it is decentralized in one respect:  the E.U. doesn’t dictate healthcare to its member countries. Most people go to doctors and hospitals that are located near where they live, so health-care is a local activity for which local government is appropriate, when necessary. We call this “self-government” and the Europeans have the right idea, although in most countries they ultimately discredit themselves by rejecting markets and competition.

The European equivalent in the U.S. would be for the states to regulate healthcare, but don’t expect the liberal wonks to support a genuine federalism. Rather, their preference is a system set to place 315 million people under the thumb of a single authority. The liberal wonks seem congenitally unable to grasp the concepts of freedom and self-government. It’s almost as if Dostoevsky’s Grand Inquisitor and his minions are editing the liberal wonk blogs.

Liberals reject markets and competition in healthcare and that fact alone explains the inadequacy of the liberal view. Yet the wonks continue to pontificate about all kinds of healthcare details that in the overall scheme of things are truly irrelevant. They remind me of the medieval scholars who debated how many angels can dance on the head of a pin, except that the liberal exercise is not quite so benign.

* When I suggested they add the truth about competition to the list, not a single reader or contributor responded.

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More Insights From Wise Boy

Posted on June 23, 2013 by alsanblog

So Wise Boy (aka Ezra Klein) is perplexed. You see, he noticed that Republicans support the idea of doing long-run estimates of the federal budget deficit, hope to secure the long border between the U.S. and Mexico, and believe that the government can be trusted to gather metadata about Americans’ phone calls without obliterating civil liberties. For Klein, the question is (in the print version of his article):

If Republicans think the government is capable of predicting the path of the economy 30 years into the future while locking down the border and picking through all electronic communications, why aren’t they socialists?

Aha, Wise Boy surely has outwitted the Republicans on this one. Indeed, why aren’t Republicans socialists? But wait, by mocking the Republicans about their newly found love of big government, Klein implies that he himself is skeptical of (not to mention he explicitly questions) the capability and trustworthiness of big government in these areas. So perhaps the real question is, why doesn’t Wise Boy support freedom and competition?

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Liberals “Fighting” For Women’s Rights

Posted on June 22, 2013 by alsanblog

One of the greatest threats to women and women’s rights in the world today is found in the misogyny that characterizes life in the Mideast, southern Asia, and other similar places around the world. And liberals, who pride themselves on their support and fight for women’s rights, are in the thick of the action. But what exactly are liberals doing to improve the plight of women? Well, let’s review:

Democrats in Congress, led by Rep. Barbara Lee (D-Calif.), have passed a resolution warning us of the “disparate impact” of climate change on women around the world because of its effect on agriculture. Okay, but this reminds me of Xerxes, king of ancient Persia, who sent servants to lash the Hellespont after a storm upset his plans to invade Greece. Maybe Congress can send servants to lash climate change or at least recommend that DOJ sue climate change under a “disparate impact” theory of discrimination.

Then there’s the intrepid Hillary Clinton, giving “impassioned” speeches for women’s rights and equality in developing nations. Of course, nobody can name any significant accomplishment from Clinton’s four years as secretary of state, let alone one that advanced women’s rights, but at least she’s impassioned. But then again – if we add up all her travel miles as secretary of state and redefine women’s rights = travel, Clinton doesn’t look too bad.

In her new twitter bio, Clinton calls herself a “glass ceiling cracker.” Not only is this inaccurate (she wasn’t the first female senator or secretary of state), but it’s odd in another way:  one might think that an impassioned glass ceiling cracker would not stand still as her husband repeatedly and publicly humiliated her with other women. But I guess Hillary needed to ride Bill’s coattails to the Senate and the presidency, so ambition apparently trumps women’s rights. Perhaps she should add “coattail rider” to her twitter bio.

Another courageous liberal fighting for women is Barbra Streisand who is standing up to discrimination against women in, let’s see, oh, Israel. Apparently a small group of ultra-Orthodox Jews object to women who seek to wear prayer shawls and pray at the Western Wall in Jerusalem. And although the Israeli Justice Minister has introduced legislation making these discriminatory practices illegal and a court has upheld the right of women to wear prayer shawls, it’s still good to see that Barbra is on the job.

Finally, not to be outdone by the geriatric crowd, younger liberals sprang into action through the recent London concert organized by the Chime for Change campaign and headlined by none other than Beyoncé herself. Beyoncé is the singer who used PERs (performance enhancing recordings) at the presidential inauguration earlier this year, so who knows if she was actually singing during the concert. In any event, one segment of the concert included a video of the story of a woman (i.e., Jessica’s Story) who was gang raped in – wait for it – the United States.

So according to liberals, the true villains oppressing and denying women their rights are “climate change,” Israel, and the U.S. This is how liberals view the world and with this kind of stupidity from those who are running things these days, the future of the truly oppressed is not very bright, indeed.

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More Obfuscation From Ezra Klein

Posted on June 11, 2013 by alsanblog

Wise Boy (aka Ezra Klein) is at it again:  destroying the meaning of words in the best Orwellian tradition in support of statism. Wise Boy is one of those liberals who confuses matters by calling government spending “investment” or “insurance.” And he loves to equate tax expenditure with government spending, which allows him and other liberals to argue that if Republicans really want to reduce spending, they should just raise taxes (see my post on this latter point here).

Not one to rest on his laurels, Klein now seeks to undermine the meaning of the words “deficit” and “debt.” Taking a page from former Treasury Secretary Larry Summers’ playbook, Wise Boy explains that if we don’t spend on infrastructure now, we’ll just have to do it later. According to Wise Boy and Summers, to defer maintenance on infrastruc-ture burdens “future generations,” and so they’ve decided that we should call this bur-den “debt.”

After defining “debt” as deferred spending, Klein then argues that to reduce the national debt, we should increase borrowing and spending now. Got it? On Klein’s planet, more borrowing = less debt. Of course, this is so incoherent and stupid that Klein cannot possibly believe what he’s saying and his conclusion is best understood as sheer liberal duplicity. Not to mention it serves as a nice example of what liberals really think about the intelligence of Americans.

Wise Boy argues that borrowing more for infrastructure spending is a good deal these days because real interest rates are negative. As Klein explains:  a negative interest rate “means markets are so nervous that they will literally pay us to keep their money safe for them.” But why are markets so nervous in the first place? Could it just possibly be due to the uncertainty caused by the central government as it continues to borrow, spend, and increase the debt?

Klein’s reasoning actually could set up a negative feedback loop:  excessive government borrowing and spending makes markets nervous and leads to negative interest rates. This in turn leads to greater borrowing (if we take Klein’s advice) and a larger deficit, leading to more market nervousness, & etc. until the economy falls apart. But don’t expect Klein to consider any of this:  it would mean questioning his unrelenting faith in big govern-ment.

As we’ve seen, Klein ultimately argues we should spend more now on infrastructure because it will be more costly in the future. So why the obfuscation? Can’t he just state his position without the deception? By the way, his argument is just another version of liberals saying trust us:  in exchange for more spending now, we’ll cut spending in the future. Yeah, sure.

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