Obama & the Managerial High Ground

In a previous post I looked at what appears to be Obama attempt to stay above the political realm by staking out the moral high ground.
Most of Obama's words thus far suggest that he is staking a claim for the Moral High Ground. He has released the torture memos because he believes he is better than the Bush administration in this regard. He is releasing the pictures of "torture" prisoners for the very same reasons. When he was oversea he apologized for past US actions, because he nominally believe the US could have done better, and that under him we will. There are two things to consider here.

First is that if he thinks this will make the US safer or better he is wrong. Those who work toward our destruction do so not because of some reasoning, but some hatred. That we could have been better angers them. That we believe we could be better also angers them. There mere fact that we are different from what they want to be angers them, regardless of how good we are. Staking claim to the Moral High Ground may make things worse for us. It certainly not keeps us safer. Those that seek to compete against us will not treat us better, or help us further our goals. They compete against us because they think they can beat us. Given any opportunity to do so they will certainly try regardless of who has the Moral High Ground.

Second is that if he thinks he can claim the Moral High Ground he is also wrong. This sort of thinking seems rampant to those without practical experience in life, living by concepts they believe the world should operate by rather than the principles the world lives by. This is akin to a rich couple believing their wealth keeps their estate well maintained, rather than understanding that it is still the housekeepers and gardeners' labors over dirt. Or a hospital CEO proclaiming how many lives his hospital saves, without acknowledging it is the doctors and nurses work in soilage and pus. Or a general believing he won the battle rather than the soldiers killing and maiming. The difference between Obama's Moral High Ground and reality is the difference between Ideals and Practice.

At best, his stake for the Moral High Ground only shows his naïveté. What it clearly reveals is his hubris, not his humanity. And through it all, he has also demonstrated willingness to use politics to further himself.

I return to this topic after reviewing two recent events pertaining to the current Obama administration.

The first is his attempt to push through a health care reform package that he did not craft, that he doesn't know much about, and doesn't really care too much regarding the details other than it gets done and gets done quickly. Some commentators have suggested that he is trying to avoid the mistakes of Clinton's own attempt to reform health care, which was to too involved in its creation. To me it seems Obama have decided to allow others to craft the reform, and he would just be the catalyst to make it happen. This naturally allow him to take credit for its passage, should it pass, as well as distance himself from it, should it fail (and it should).

The second is his "allowance" of the Justice Department to investigate the CIA interrogation of captured terrorist (note it really just one terrorist that this is all about, the guy who helped planned the 911 attack Khalid Sheikh Mohammed). To me he is putting both attorney general Eric Holder out on the limb as the one person actually politically responsible for the investigation (though certainly another person as lead investigator actually will do the factual work) as well as as Leon Panetta as the current head of the CIA. This way he will appease the far left who have clamored for an investigation. The political fall out during the investigation will now be between the CIA and the Justice department with him as the overlord observer. Should the investigation finds something, Panetta will certainly be the fall guy within his own CIA for allowing the investigation. Should the investigation finds nothing, Holder will be left holding an empty bag and suffer the rantings of the unhinged left. Either way Obama is shirking actual responsibility for the investigation, or the even more responsible decision not to investigate at all.

Everything points to Obama being a very poor leader. He may be inspiring to his supporter but he doesn't take ownerships of his decisions, letting others fall away while he takes credit for their success or distance himself for their failure. A true leader lead by leading, not by being.


"Spreading the Wealth" for Health Care

Over at Bookworm room, she reports a conversation with he Kaiser Permanente Doctor.
The doctor had a very interesting take on the current uninsured. I said that a lot of people are opposed to the proposed plan because they recognize that those numbers being bandied about regarding uninsured are false. That is, the 45 million (or whatever) uninsured aren’t uninsured simply because of poverty. The vast majority are either illegal aliens (and you can see his views about those above) or voluntary uninsured. As to the latter, my friend thinks they’re the real problem. He understands that these people are voluntary uninsured because they are young and healthy. They’re gambling that they won’t need insurance. Or they might be marginally insured, in that they buy a $10 policy with a $10,000 deductible, just in case something really bad happens. They are not putting money into the system.

What this doctor likes about mandatory universal health care is that it forces the voluntary uninsured into the system. He thinks it grossly unfair that they are not paying into the system, while people who need insurance are paying. If there were more money in the system, the person with a preexisting condition would not be required to pay as much for his insurance. In other words, he thinks that the insurance system should be a cross between an uninsured motorist requirement and social security. He freely admits that this is a government mandated spread the wealth approach, and one of which he approves.

Because he has a philosophical approach that requires everyone to be in the health care market, whether they want to be or not, he is unperturbed by CBO numbers projecting vast increases in the cost of health care under the new plan. He thinks the CBO people, being accountants and not doctors, have no idea what they’re talking about. What he envisions is a brave new world in which the government simply provides more insured people who will use medical services. He finds it inconceivable that universal health care (which is a system by which all people are insured, but medical care providers continue to be privately owned) can shade into a single payer, government-owned system.

He does not believe that having the government as an insurance provider will change the system and drive out private insurance. Nor does he believe that, even if all private insurance is gone, with the government being the only bill-payer, that this will do anything other than purify the private medical system of the current social injustices that plague it. He also refused to believe that, in other countries that have socialized medicine, there are treatments that are denied to people, not because the treatments don’t work, but because the people are deemed (by government mandate) to be too old or too ill to be worthy of treatment. As for government lists of treatment, he says we have them already, because every care provider is in thrall to Medicare and related government programs. He did not see a difference between the fact that Medicare sets prices, but does not yet set age or health boundaries for providing treatments.

He is very disturbed by the opposition to the health care plan, which he sees as the product of Republican cabals who are shipping agitators into local town hall meetings. The absence of any concrete evidence of such busing (such as buses) does not change his mind.

I explained that people are also concerned that they’re being sold a bill of goods that is not as promised. The rush to pass a bill (three weeks “deliberation” to change a sixth of the economy) didn’t bother him at all. “That’s how things go.” When I raised specific concerns about the existing bill (the inability to stick with your insurance if you change jobs, the incentive for employers to dump insurance and drive people into the government system, the government decision boards re treatments, the enhanced access the government will have to our finances) he just didn’t care. He thought those were petty concerns and was sure I was wrong. He also discounted the hidden taxes in the bill. “Obama promised that he’d veto any taxes.”

The doctor also dismissed the fact that many of the bill’s proponents — including the president himself — are on record as supporting single-payer care (which is different from the universal care this doctor supports). He denies that Obama lied at the New Hampshire townhall when he when he said ““I have not said that I am a supporter of a single-payer system,” despite several past instances of his having said precisely that. “There’s no lie there,” said my doctor friend. “Obama did not say that he ‘never’ supported single payer care. He’s talking in the present tense. He doesn’t support it now.” I said that, if that’s what the great communicator meant, that’s what he should have said, including explaining why he’s changed his mind. “Nah,” said the doctor. It was clear.

The conversation ended there.

My response, with some additional comment not posted there in italic, is as follows.

1. Unnecessary tests rarely profits the doctor ordering it, whether it be lab tests or procedures. When a doctor sends a patient to get endoscopy, the gastroenterologist profits (if not on salary) from the procedure, not the referring physician. Yes the referring doctor could have just given you a trial treatment, as well as the gastroenterologist. Kaiser though also would not profited from the endoscopy it this was an in-network service. Kaiser predominantly profit from the subscription/insurance fee of its members by taking more in than they spend, by taking money from people who use less of kaiser services and spending some (but not all) of it on those who need and use more.

2. Health systems thus profit by taking money from those who subscribe for health services but do not use as much of it as they put in. If we look at our national health care system overall, the problem may seem that the uninsured are not putting money into the system and thus your doctor’s impression may seem correct but it is not. The uninsured do put money into the system already through taxes they pay to the local, state, and federal system. Those who choose to go uninsured likely believe that they would not need to be insured because they don’t expect to use health care should have that choice respected. In large part these are young people who really don’t need to. To think we should force them, or those who cannot afford insurance, to buy insurance or buy into the health care finance system seems coercive to me.

3. I have no problem with the doctor being agreeable to the government spreading the wealth in this regard for health care. If you think it is a form of taxation for the general well being of the nation, like that of national defense for instance, or border control, or disasters relief a health care tax might even seem reasonable. What is not reasonable is to think that as a democracy that rose party out of refusal to pay unfair taxes, that the doctor would take exceptions to people, whether it be a majority or a minority voice of protest. Isn't that the essence of the Tea Parties and the townhall protests currently underway regarding what the current government proposes. And should the majority decides against this tax should it be forced on them anyway?

4. For a learned person, the doctor still made several gross error in analysis and judgment. The first being a sampling error based on anecdotal experience. Just because the Kaiser system works does not mean a government managed system would. Yes clearly a “public” option will drive private plans out of business because the government plan will get income from everyone through taxation, even the already insured will pay them, thus the government’s “public” option plan will always have a higher ratio of pay-ins to pay-outs than any private plan could match. And since the government has the right to set health care standards for all, private health system cannot hope to compete. In addition, the government has never been known for being efficient financially or in service provided whether it be Amtrak, the post office, or Veterans Health Administration. What partly work now, or even what works well now, can work even less later. Not all reforms make things better.

5. The second error the doctor made is likely based on hubris of being an educated physician thinking he knows better for the patient than the patient himself. Though the current drive for health care reform is really about reforming to control costs rather than improve care access (though some will certainly benefit from improved access), when it comes to the ultimate and primary recipient of health care, it is about quality of care. The current anxiety and consternation among the majority of Americans center around the care they are currently getting as contrasted to the care they may or may not get with the reform. The doctor likely believe he can deliver the same (high?) level of care to his patients and are thus is dismissive of patients general concern over health care reform. He may not realize some patients may not think so highly of his delivery, and he certainly underestimate how someone smarter (or perhaps even less smart than he but has a better political pedigree) than he, another physician installed as a health care czar, may feel inclined to believe he is wasteful and starts to dictate how he could do better, placing him in a position to have to change his standards of practice to conform to someone else’s standards. When one is smart, there is a tendency to believe that one is right and that this right is self evident to anyone else with half a brain.

6. The third error the doctor made is allowing his own convictions and bias blind him to information challenging the veracity of his own beliefs.

I have frequently noted that when a doctor speaks out for or against in the current health care debate, they are given special status and what they say seems to gain greater significance. But shouldn't the truth and the justice of any argument be equally valid and valued regardless of the speaker? It is all really rather amusing.


The Cost of Health Care

As part of the justification to "reform" the health care system in the US is predicated on the argument that the cost of health care in the US is too high. How do they know? It is because our the amount of money we spend on health care is higher than that of other industrialized nations without a better outcome? In these analysis, one such better outcome is typically measured as survival of some sort or another. I think survival measures are misleading for several reasons. Take infant survival for instance. Yes, as reported to the World Health Organization the US has higher infant mortality rates than most Western nations. Why is this? Partly because of how we calculate the mortality figure; what constitute a death is obvious but what constitute a birth is not always so obvious. The WHO specifies a birth as a "viable birth" but in some nations, if a live infant is born without meeting their ability to keep alive, it isn't considered a "viable birth".
Using mortality as a measure of health care outcome also doesn't show the whole picture. In the US we spend a significant amount of resources on palliation to improve quality of life without improving the over all survival. Medicare spends about 25-30% of its budget each year on the last year's of life. We typically do all we can to save a life and spends the resources to do so. But it isn't just in the last year of life. In Germany for instance, post operative analgesia are typically aspirins and ibuprofen, analgesics we can get over the counter here in the US. Here in the US, nearly all post operative analgesics are narcotic based, with pills for outpatient care and patient controlled intravenous injection of narcotics for inpatient recovery. These things cost money without extending longevity.
But for somethings longevity is better in the US. Take cancer survival for instance. But longevity also varies across the globe that has nothing to do with health care delivery. The US has a significantly higher population of obese patient and a higher incidence of heart disease, likely due to our diet.

The second motive to reform health care is to reign in health care inflation. I remember the same arguments a decade ago for Health Maintenance Organization (HMOs). For a few years, health care inflation was reigned in but afterward, it resume at previous rates of increase. The chart below is interesting in that this isn't just in the US but the health care inflation is on a similar projection in the UK as well as France.

What this graph signifies again is that there a cultural component the health care cost and health care inflation that is not being discussed. Western nations have rapidly rising health care cost, Japan does not. That there is cultural variation on what we spend money on should come as no surprise. For instance, most homes in the US has air conditioning and thus we have less consequences of heat waves. In France this isn't so.
All in all, we get what we pay for. In the US we spend more on palliative measures and this in actuality is a mark of our wealth. Health care isn't about survival in the US, health care is also about quality of life. This is a choice our society has decided on. Yes like any choice we can change our mind but we need to be cognizant what the debate should entails. I suspect some advocate for health care reforms knows this but also realize that a supposed cost saving argument is easier made than a cultural changing argument.


Capitalism and Creating Jobs

This was published in the WSJ by Bill Burbage on Thursday 20090730. I thought it made alot of sense and rather insightful. Perhaps it was obvious but sometimes the obvious needs to be restated.
No entrepreneur has ever had an objective of “creating jobs.” Everybody, employers and individuals alike, constantly seeks to eliminate jobs. As Adam Smith put it in “The Wealth of Nations,” all of the tools and machines that we use are designed to “facilitate and abridge labour,” i.e., to reduce jobs. People go into business to make a profit. If any jobs are created in the process, they are created because there is no way to avoid it. Employees are expensive.

To create more jobs, the sovereign must remove as many obstacles as he can between the entrepreneur and his ability to make a profit. No other stimulus is necessary. As Smith says: “The natural effort of every individual to better his own condition, when suffered to exert itself with freedom and security is so powerful a principle that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human laws too often encumbers its operations.”

In his wildest nightmare Smith could not have imagined the “impertinent obstruction” of a 15.3% payroll tax—not on profits but on total revenues. Mandates by the federal government have made the hiring of an employee more akin to adopting him and his family.

To those who think that a recovery is automatic based on historical or cyclical experience, consider that Cuba has not recovered in 50 years. It will not recover in another 50 years unless it restores an environment that is not hostile to entrepreneurial activity; neither will the U.S. Instead of eliminating the obstacles that already exist, we are preparing to pile on even more with the carbon tax and health-care reform.