Free Markets, Free People

Daily Archives: July 16, 2009


Quote of the Day

If we didn’t have Joe Biden, we’d have to invent him.  Here’s Joe talking about the Obama administration’s health care plan:

“Now, people when I say that look at me and say, ‘What are you talking about, Joe? You’re telling me we have to go spend money to keep from going bankrupt?’” Biden said. “The answer is yes, that’s what I’m telling you.”

In light of the CBO’s latest testimony on the Democratic health care proposals, this does indeed become a bit of the “we had to destroy the village to save the village” type rationale, doesn’t it?

~McQ


Ed Morrissey Hits A Home Run

If I could see my old buddy Ed Morrissey today I’d give him a hug. A man-hug of course, but still, what he wrote today deserves that.

Ed managed, in a well-written and timely bit of sarcasm, to lay bare the rotten claim that health care is a “right”. And he does it brilliantly by using everyone’s favorite foil – lawyers – and illustrating absurdity with absurdity.

Heh … it’s OK Michael, you’ll enjoy it too.

Go. Read.

~McQ


CBO: Busting The Health Care Savings Lie

Does anyone know who Dr. Doug Elmendorf is? He’s the director of the Congressional Budget Office. And today, in testimony before the Senate Budget Committee he answered a few questions from Sen. Kent Conrad (D-ND) about the supposed great savings the country would reap under the planned Democrat “health care reform” bills under consideration by Congress.

Here it is uncut, unfiltered and unedited [emphasis mine]:

Conrad: Dr. Elmendorf, I am going to really put you on the spot because we are in the middle of this health care debate, but it is critically important that we get this right. Everyone has said, virtually everyone, that bending the cost curve over time is critically important and one of the key goals of this entire effort. From what you have seen from the products of the committees that have reported, do you see a successful effort being mounted to bend the long-term cost curve?

Elmendorf: No, Mr. Chairman. In the legislation that has been reported we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount. And on the contrary, the legislation significantly expands the federal responsibility for health care costs.

Conrad: So the cost curve in your judgement is being bent, but it is being bent the wrong way. Is that correct?

Elmendorf: The way I would put it is that the curve is being raised, so there is a justifiable focus on growth rates because of course it is the compounding of growth rates faster than the economy that leads to these unsustainable paths. But it is very hard to look out over a very long term and say very accurate things about growth rates. So most health experts that we talk with focus particularly on what is happening over the next 10 or 20 years, still a pretty long time period for projections, but focus on the next 10 or 20 years and look at whether efforts are being made that are bringing costs down or pushing costs up over that period.

As we wrote in our letter to you and Senator Gregg, the creation of a new subsidy for health insurance, which is a critical part of expanding health insurance coverage in our judgement, would by itself increase the federal responsibility for health care that raises federal spending on health care. It raises the amount of activity that is growing at this unsustainable rate and to offset that there has to be very substantial reductions in other parts of the federal commitment to health care, either on the tax revenue side through changes in the tax exclusion or on the spending side through reforms in Medicare and Medicaid. Certainly reforms of that sort are included in some of the packages, and we are still analyzing the reforms in the House package. Legislation was only released as you know two days ago. But changes we have looked at so far do not represent the fundamental change on the order of magnitude that would be necessary to offset the direct increase in federal health costs from the insurance coverage proposals.

Conrad: And what about the Finance Committee package, as it stands?

Elmendorf: I can’t speak to that Mr. Chairman. We have been working with the Finance Committee and the staff for a number of months on proposals that they have been addressing. But our consultations with them have been confidential because they have not yet released the legislation, and I don’t want to speak publicly about that.

Conrad: All right. In terms of those things that are public from other plans, what are the things that are missing that in your judgement prevent a bending of the cost curve in the right way?

Elmendorf: Bending the cost curve is difficult. As we said in our letter to you, there is a widespread consensus, and you quoted some of this, that a significant share of health spending is not contributing to health. But rooting out that spending without taking away spending that is beneficial to health is not straightforward.

Again, the way I think experts would put it – the money is out there, but it is not going to walk in the government’s door by itself. And devising the legislative strategies and the regulatory changes that would generate these changes is not straight forward. But the directions that have widespread support among health analysts include changing the preferential tax treatment of health insurance. We have a subsidy for larger health insurance policies in our tax code, and that like other subsidies encourages more of that activity. Reducing that subsidy would reduce that. And on the other side, changing the way that Medicare pays providers in an effort to encourage a focus on cost effectiveness in health care and not encourage, as a fee for service system tends to, for the delivery of additional services because bills for that will be paid.

So here is the opinion of the director of the organization that both sides like to quote and use as a definitive source saying that what has been legislatively put on the table will not – not – bend the “cost curve” down, but, will instead bend it upward. It does not – not – in fact accomplish the goal of “cost savings” in terms of health care spending.  Anyone with the brain of a glow worm who had taken a look at the proposals and the promises knew it was a large load of pony pellets.   Those on the side of “belief and faith” (and hopeychangitude) chose to believe in the politician’s promises and have faith in their truth.

Unfortunately for them, Dr. Elmendorf apparently deals in facts and figures.

The last part of the questioning is equally important.  Elmendorf discusses the funding mechanism (along with the eternal promise of corralling “waste, fraud and abuse”). Some savings will come from eliminating waste, fraud and abuse (all of which are rampant in both Medicare and Medicaid and politicians have vowed to end for decades), but not enough to fund the rest.

So they’re left with few options besides a general tax increase. Those options, per Elmendorf include taxing health care benefits and reducing the cost of Medicare by changing how providers are paid (i.e. cutting payments and prohibiting procedures Medicare doesn’t feel are necessary to treatment – the very accusation the government health care proponents constantly level at private insurance).  The first isn’t very palatable politically (and they’d have to exempt unions which would be very unpopular politically) and the second would most likely find a back lash among seniors.  So the fall back position is “tax the rich” – an unstable revenue stream (once the rich figure out how to dodge it).

Anyway, the Democrat’s “cost savings” narrative is again busted. Not only will the proposed legislation not save money, it will cost us a bundle. As I said yesterday, I believe, when I posted the chart with the curve of proposed health care spending under the Democrat bills, the curve isn’t going to go down.

Today the CBO validated that point.

~McQ


Rationing Health Care

Peter Singer has popped up again and he engages in telling us a simple truth about health care – no matter what system you have, health care will be rationed.  Well, for those of us who understand supply and demand we’ve always known health care would be rationed.  When you have 800,000 doctors in a country of 300 million, it isn’t really that difficult to figure out.

However, that’s really not Singer’s point.  If you read through his multiple page piece, you’ll find that he is of the opinion that government bureaucrats would be much better at rationing than would private bureaucrats.  And he attempts to make his point by selectively offering facts that will back his position.

But this amazing paragraph pretty much represents where he believes we must go with our health care reform (and indications are our politicians implicitly agree given the goals they’ve set for “reform”):

Of course, it’s one thing to accept that there’s a limit to how much we should spend to save a human life, and another to set that limit. The dollar value that bureaucrats place on a generic human life is intended to reflect social values, as revealed in our behavior. It is the answer to the question “How much are you willing to pay to save your life?” — except that, of course, if you asked that question of people who were facing death, they would be prepared to pay almost anything to save their lives. So instead, economists note how much people are prepared to pay to reduce the risk that they will die. How much will people pay for air bags in a car, for instance? Once you know how much they will pay for a specified reduction in risk, you multiply the amount that people are willing to pay by how much the risk has been reduced, and then you know, or so the theory goes, what value people place on their lives. Suppose that there is a 1 in 100,000 chance that an air bag in my car will save my life, and that I would pay $50 — but no more than that — for an air bag. Then it looks as if I value my life at $50 x 100,000, or $5 million.

Frankly, this paragraph should make your skin crawl. Because what Singer is doing here is presuming we all accept that others, those nameless bureaucrats he’s so fond of if they happen to be from the government, now have the job (and duty) to decide what your life is worth. Not you. Not your family.

No, what Singer proposes is reducing your life to an arbitrary worth beyond which “they” are not willing to pay to save it. Whether you are or not is apparently not a factor in such calculations.

Singer goes on:

Nevertheless this approach to setting a value on a human life is at least closer to what we really believe — and to what we should believe — than dramatic pronouncements about the infinite value of every human life, or the suggestion that we cannot distinguish between the value of a single human life and the value of a million human lives, or even of the rest of the world. Though such feel-good claims may have some symbolic value in particular circumstances, to take them seriously and apply them — for instance, by leaving it to chance whether we save one life or a billion — would be deeply unethical.

“Deeply unethical” for whom? Certainly not the person with the desire and means to do what they feel is necessary to extend their life or the life of a loved one. They, of course, would value human life above the arbitrary level which Singer and “economists” calculate.

But Singer’s premise here is they shouldn’t have that right. Because other’s don’t have the same opportunity. It would be “deeply unethical” for some to be able to “buy” what others can’t afford. So instead, the ethical thing to do is have everyone held to the economically calculated standard, whether they have the means and desire to do otherwise or not.

Of course we can argue this philosophically for decades, but the point remains that rationing is a feature of any health care system. What isn’t a feature of every health care system is choice. What Singer is actually proposing is taking the choice that now exists in our health care system away and putting everyone under the arbitrary rationing guidelines calculated by government.

He says as much in his next paragraph:

Governments implicitly place a dollar value on a human life when they decide how much is to be spent on health care programs and how much on other public goods that are not directed toward saving lives. The task of health care bureaucrats is then to get the best value for the resources they have been allocated. It is the familiar comparative exercise of getting the most bang for your buck.

The best bang for “your” buck? It’s no longer “your” buck at that point. It is the government’s buck and you have no choice in how it will be spent or “saved”. You will, however, be on the receiving end of any decision.

And where that leads (and where Singer was going with all of this to begin with) is found here:

As a first take, we might say that the good achieved by health care is the number of lives saved. But that is too crude. The death of a teenager is a greater tragedy than the death of an 85-year-old, and this should be reflected in our priorities. We can accommodate that difference by calculating the number of life-years saved, rather than simply the number of lives saved. If a teenager can be expected to live another 70 years, saving her life counts as a gain of 70 life-years, whereas if a person of 85 can be expected to live another 5 years, then saving the 85-year-old will count as a gain of only 5 life-years. That suggests that saving one teenager is equivalent to saving 14 85-year-olds.

Pretty darn predictable, no? This is the logical end of Singer’s rationing policy. Utilitarian calculation based on arbitrary worth. And the inevitable decision to ration in such a way as to deny the elderly because they just aren’t “worth” it anymore.

And that, per Singer, would be very ethical.

Trust me, those collectivist premises are what will drive government run health care’s rationing. Given the goals (more coverage, less cost) they must. Choice will eventually be driven out of the system and, as they must, bureaucrats will decide how long you will be allowed to live.

Count on it.

~McQ


Health Care Warning Bells

Just a few of the gems beginning to come out of the Democratic health care reform proposals.

Keith Hennessey wonders if the Democrats really want to tax the uninsured because as the bill is structured a) not everyone will have insurance and b) not everyone will be able to afford it meaning c) they pay a tax. He gives 2 examples:

* Bob is a single 50-year old non-smoking small business employee who makes $50K per year before taxes and does not have health insurance.
* Bob cannot afford a $1,600 bare bones health insurance policy, much less a $3K — $5K policy.
* Bob would get no subsidies under this bill, and his employer would face no penalty for not providing him with health insurance.
* Bob would end up without health insurance and would have to pay $1,150 more in taxes.

Now, what you can expect is not that Democrats would stick with the provisions of the bill, but instead they’d find some way to fold Bob into the program further raising the cost.

Same with Freddy and Kelsey:

* Freddy and Kelsey are a 40-year old couple with two kids. They own and run a small tourist shop in Orlando, Florida.
* They are the only employees, and earn a combined $90K per year.
* They cannot afford even an inexpensive health insurance plan, and so the House bill would make them pay $2,050 in higher taxes.

So given those figures (and be sure to read the whole post by Hennessey) and the estimate of 8 million falling into this category, obviously the bill will cost more than projected.

Second point.

When we first saw the paragraph Tuesday, just after the 1,018-page document was released, we thought we surely must be misreading it. So we sought help from the House Ways and Means Committee.

It turns out we were right: The provision would indeed outlaw individual private coverage. Under the Orwellian header of “Protecting The Choice To Keep Current Coverage,” the “Limitation On New Enrollment” section of the bill clearly states:

“Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day” of the year the legislation becomes law.

So we can all keep our coverage, just as promised — with, of course, exceptions: Those who currently have private individual coverage won’t be able to change it. Nor will those who leave a company to work for themselves be free to buy individual plans from private carriers.

While assuring everyone that the same choices we now have would still in the system, this was discovered a mere 16 pages into the 1,000 page monstrosity. I’m sure there are other gems to be had in there as well. But the obvious point here is this puts people who make the choice, for instance, to go into business for themselves, in a situation where they are unable to buy health insurance from a private carrier, whether they want too or not. Of course, that will go a long way toward killing any private market in that niche of the insurance industry. And where will these people eventually end up? On a subsidized public plan, of course.

If that’s not bad enough, there’s the planned expansion of Medicaid. What the federal government plans to do is expand insurance coverage under Medicaid by 11 to 20 million people depending on which percentage above the poverty rate the final bill has. But states pay a large portion of Medicaid expenses. The House version calls on the fed to pick up all the expenses while promising to enact big savings in the program. The Senate version has the fed paying the full freight for 5 years. The latter is more likely to be the version that would pass simply because they can hold the “cost” numbers down a bit by doing so.

But not so in the states where the mandated expansion of Medicaid will end up having to be funded by each state’s taxpayers.

Keep these in mind as you hear cost figures bandied about by the blowhards on the Hill. They give used car salesmen a bad name.

~McQ


Scientists Say Climate Models “Fundamentally Wrong”

This will throw an inconvenient kink in the Al Gore “earth has a fever” pitch, won’t it?

Could the best climate models — the ones used to predict global warming — all be wrong?

Maybe so, says a new study published online today in the journal Nature Geoscience. The report found that only about half of the warming that occurred during a natural climate change 55 million years ago can be explained by excess carbon dioxide in the atmosphere. What caused the remainder of the warming is a mystery.

“In a nutshell, theoretical models cannot explain what we observe in the geological record,” says oceanographer Gerald Dickens, study co-author and professor of Earth Science at Rice University in Houston. “There appears to be something fundamentally wrong with the way temperature and carbon are linked in climate models.”

As someone said recently, science is skeptism, and this is science. This is science taking another look and admitting “something’s just not right” with the current warming theories. And the problem begins with thier climate models.

The explanation is found in the earth’s history:

During the warming period, known as the “Palaeocene-Eocene thermal maximum” (PETM), for unknown reasons, the amount of carbon in Earth’s atmosphere rose rapidly. This makes the PETM one of the best ancient climate analogues for present-day Earth.

As the levels of carbon increased, global surface temperatures also rose dramatically during the PETM. Average temperatures worldwide rose by around 13 degrees in the relatively short geological span of about 10,000 years.

The conclusion, Dickens said, is that something other than carbon dioxide caused much of this ancient warming. “Some feedback loop or other processes that aren’t accounted for in these models — the same ones used by the Intergovernmental Panel on Climate Change for current best estimates of 21st century warming — caused a substantial portion of the warming that occurred during the PETM.”

One can only assume, if you want to go along with the oracle’s claims, that Fred Flintstone and his buddy Barney were driving their stonemobiles way to much.  Except Fred and Barney weren’t even around then

The point made by Dickens is a solid one. If your model can’t “model” the past given all you know about it, how in the world can anyone have any scientific confidence in its modeling of the future? Here we have a period of the earth’s history (55.8 million years ago) in which man hadn’t even shown up on the scene yet, but where temperatures rose fairly drastically, globally, in a relatively short time (20,000 years). Why?

We’ve been led to believe that increases CO2 are the root cause and man is the reason for the rise in C02. But PETM seems to dispel that theory doesn’t it?

Interesting.

Nice to see science beginning to exert itself again as it reexamines what has become a mostly faith-based exercise in fear-mongering. Now if the politicians would only catch up.

~McQ