Monthly Archives: August 2012

A better use for those sixteen thousand IRS agents (or the money used to hire them)

Back in 2009 and 2010, conservatives repeated that ObamaCare provided funding for 16,000 new IRS agents but additional funding for physicians.  PolitiFact suggests that this may not be accurate, since the number is generated from the $5 billion to $10 billion in additional funds budgeted to the IRS.  (It did not, however, dispute that ObamaCare gives many billions to the IRS but no additional funds to doctors or for doctor training.)

Then there is this from Bloomberg Businessweek: in coming years, America will probably need 130,000  more doctors than it currently has.  Alex Wayne explains,

One major reason: The residency programs to train new doctors are largely paid for by the federal government, and the number of students accepted into such programs has been capped at the same level for 15 years. Medical schools are holding back on further expansion because the number of applicants for residencies already exceeds the available positions, according to the National Resident Matching Program, a 60-year-old Washington-based nonprofit that oversees the program.

Then this:

[Teaching hospitals] support bipartisan legislation introduced this month that would add 3,000 residencies a year through 2017 at a cost to taxpayers of about $9 billion. Deficit-watching Republicans, including Price, say private funding needs to be identified instead.

Let’s go for the obvious solution: spend the $5 to $10 billion that would have been given to the IRS on training more doctors.  Fewer metaphorical headaches for all Americans, more primary-care physicians, less government intrusion.

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Filed under ObamaCare, Reforming health care

A random diversion into energy policy and math

The Obama Administration will begin implementing rules requiring cars to get an average of 54.5 miles per gallon, up from 29.7 mpg today.  Allegedly, this will reduce our dependence on foreign oil.

Allegedly.  Unfortunately, we express fuel usage in miles per gallon, which makes sense if Americans use a constant amount of gasoline (i.e. the denominator is gallons of gasoline).  Flipping the number around and expressing it as gallons per mile, we can see how brutal the law of diminishing returns is when applied to fuel economy.

Let’s say that you travel 600 miles in a week.  A car that gets 15 mpg will use 40 gallons in a week. If your car gets 20 mpg, you’ll use 30 gallons of gas in a week.  Move that to 30 mpg, and you’ve saved yourself 10 gallons of gasoline.  In order to save an additional ten gallons, you’ll have to get a 60 mpg car.  Ergo, the gas savings from 15 to 20 mpg, 20 to 30 mpg, and 30 to 60 mpg are identical.

Which is to say: we’ve already squeezed a lot of our gas savings out of compact cars, sedans, and light trucks.  It’s just plain math: we would do better to change a 10 mpg truck to a 15 mpg truck than we would to change a sedan, travelling the same distance annually, from 29.7 mpg to 54.5 mpg.

This doesn’t relate to health care, except to underscore the point that if you don’t understand basic math, you cannot hope to set decent public policy.

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Filed under Miscellanea

Raiding Medicare will kill forty thousand seniors per year

Last week, I pointed out that reductions in Medicare payments – already significantly lower than those given by private insurance companies – will result in fewer doctors who accept Medicare.  The “positive right” to medical care cannot be obtained without a physician willing to provide it, and that won’t happen at the prices offered through ObamaCare.

This week, Betsy McCaughy, Ph.D., crunched the numbers and reveals that ObamaCare will kill forty thousand senior citizens annually.

For those familiar with the NHS, this is not a surprise (and indicates that McCaughy may be low-balling the numbers; the population of America is roughly five times that of Great Britain). My morbid self would also like to point out that a country can bump off tens of thousands of old folks every year without doing much damage to its life expectancy – that’s just basic math.

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Filed under Medicare/Medicaid, ObamaCare

Expanding on the WSJ “Cheesecake Medicine” article

As part of its excoriation of ObamaCare and the bureaucracy created thereunder, the Wall Street Journal had this to say about a “reform”:

Dr. Gawande’s point is that medicine would function better if care were delivered by huge health systems that can achieve economies of scale, like commercial kitchens. Care ought to be standardized like preparing a side of beef, with a “single default way” to perform each treatment supposedly based on evidence, with little room for personalization.

No doubt health care could learn a lot about efficiency from a lot of industries, but to understand the core problem with assembly-line medicine, recall that ObamaCare actively promotes medical corporatism. The reason isn’t to encourage business efficiency but for political control. Liberals believe in health-care consolidation because fewer giant corporations are easier for Mr. Orszag’s central committee to control, and more amenable to its orders.

For those who know me IRL, I’m no stranger to the  medical system.  Some of the problem with ObamaCare is corporatism; a larger problem is that much of medicine is an art, not an assembly line. Back when I was 19, I had a large mass in my breast; ultrasounds and a biopsy were inconclusive.  (The result of the biopsy was that it had “abnormal architecture.”)  My doctor suggested removing it; the other option was yearly biopsies until a huge problem developed.

Pray tell, how does “unknown cellular structure with abnormal architecture” fit in under a “single default way” to “treat”?  Let’s ignore the glaring problem that few nineteen-year-old women will get treatment for breast abnormalities under ObamaCare; instead, focus on how on earth some bureaucrat could make that decision.

Back in the day, the Soviet Union set prices for goods – twenty-four million prices, to be exact.   Those in charge of delivering the standards of care will have to account for an infinite number of permutations of age, health history, family history, current health status, and the situation I had, in which diagnosis and treatment could not be disentangled (i.e. my doctor figured out what it was when she removed it from my body and sent the tumor to a pathology lab). We will either have twenty-four million different standards for treatment, or standards that do not encompass the particular condition of the patient.

If you thought that having some green-thumbed kid at an insurance company dictate your medical care was bad, just wait until those “decisions” are made via a bureaucrat’s spreadsheet.

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Filed under Economics, ObamaCare

A window into the future of our medical technology

A gas leak in the Amuary oil refinery in Venezuela caused a massive explosion that killed twenty-four people and injuerd eighty more people.  An oil union leader, Jose Bodas, said that the refinery was the result of inadequate maintenance.  The refinery was built in 1949 (Wiki).

Now, I can hear the questions – bridget, what on earth does this have to do with health care law?

Running an old, outdated oil refinery is more dangerous than running a new refinery with up-to-date technology and modern safety standards.  For over a hundred people, 1940s-era safety standards and (perhaps) routine maintenance weren’t enough.  We can, in 2012, look and say, “Hey, maybe that thing should have been overhauled, or rebuilt, sometime in the last couple of decades.”  That’s the window into the future of medical technology.  ObamaCare imposes a 2.3% tax on the sales (not profits) of all medical devices.  This will discourage innovation as medical companies will divert their money away from research and development and into taxation, and will also discourage investors and scientists, who will have the opportunity to put their money and talent into industries that are not subject to the tax – even if those industries are less beneficial to society.  (I call this the “Viagra Effect”: less socially beneficial drugs, devices, and professions are not as subject to well-meaning cost and profit regulation, and thus are the likeliest candidates for research, development, and talent.)

Unfortunately, people do not miss what they never knew they could have, but do crave what they think they deserve.  Thus, in the interests of making current technology accessible right now to everyone, we are strangling future innovation.  The irony is that expensive, patented technology will come down in price as it goes off-patent; the natural course of economic systems will make these things more affordable.  Medical innovation, however, is not a given nor a natural right.  We are starting to see what happens when broken-down, outdated energy systems are used in the twenty-first century; as Dr. Paul Hsieh says,

“For most doctors, using 1998 medical technology to treat brain tumors in 2012 would border on malpractice. When you need advanced medical care in 2022, don’t let the government’s war on medical innovation restrict your doctor to today’s 2012 technology.”

My final comment is that using current technology in the future is worse than using it today: many bacteria and viruses are becoming resistant to our drugs.

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Filed under Economics, Miscellanea, ObamaCare

What choices are we really giving women?

When Shauna Prewitt was raped in college, she chose to give birth to the baby conceived during that rape.  Then, she found out that many rapists can legally obtain visitation with the children produced during rape.  In Attorney Prewitt’s eloquent words,

It would not be long before I would learn firsthand that in the vast majority of states — 31 — men who father through rape are able to assert the same custody and visitation rights to their children that other fathers enjoy. When no law prohibits a rapist from exercising these rights, a woman may feel forced to bargain away her legal rights to a criminal trial in exchange for the rapist dropping the bid to have access to her child.

When faced with the choice between a lifetime tethered to her rapist or meaningful legal redress, the answer may be easy, but it is not painless. For the sake of her child, the woman will sacrifice her need to see her once immensely powerful perpetrator humbled by the court.

I will also point out that the rest of society is also harmed by this: rapists may attack with near-impunity, and are free to visit the same hell upon other women.

The existence of easily-accessible abortion often causes the very result it was intended to avoid: eliminating women’s choices. In 2003, Florida enacted a law which required any woman who was giving up her baby for adoption to obtain the father’s consent; if she did not know the father, she would have to publish details of the encounter in a newspaper; if raped, she would still need his consent. (Link.)  The law was repealed after victim’s rights advocates teamed up with pro-lifers to protest the likely result: shame and abortion.

When Carolyn Savage was impregnated with another couple’s embryo, due to a mistake at her clinic, she learned that she had no legal rights to the child if she continued the pregnancy, but could abort without repercussions.  (She gave birth to Logan and gave him to his genetic parents.)

These types of laws are predicated on the assumption that women can always abort, and that such an action doesn’t have moral implications, or is otherwise an undesirable outcome.   This is functionally anti-choice, because it gives a woman a choice between her legal rights and the well-being of the child in her womb.  Backwards and barbaric, that.

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Filed under Bioethics, Law

Since hospitals do not already have enough of a disincentive to take Medicare patients…

…the brilliant federal government decided to impose penalties on the ones who take the sickest and oldest patients*.

Under an ObamaCare regulation, hospitals with high readmission rates (patients who are readmitted within thirty days of being released) will be docked on their already too-low Medicare reimbursements. In theory, this is meant to encourage hospitals to provide high-quality care and to reduce costly readmissions, which result in $17.5 billion in spending every year.

It is questionable whether this will actually save any money, and may simply result in more medical spending.  Rather than release a patient who is ready to go home, a hospital may keep that person in its care – at the cost of thousands of dollars a day to the government.  Likewise, one of the largest drivers of costs in American medicine is defensive medicine, in which doctors do things that are not strictly necessary or even helpful, but intended to stave off the threat of litigation.  This regulation will only increase that incentive.

Those who are serious about ensuring that doctors give high-quality medical care to Medicare patients their first time through the hospital should look to altering the very high denial of claims rate: Medicare is twice as likely as a private insurer to deny recommended medical treatment.

This is absurd in light of ObamaCare’s implementation of an Independent Payment Advisory Board, which will issue recommendations on how to reduce Medicare spending.  The $17.5 billion spent on readmission pales in comparison to the cost of Medicare ($7.7 trillion in ten years, according to the CBO).  The logical result of this is to squeeze doctors from both sides: to refuse treatments that could prevent readmission, then reduce reimbursement when the inevitable readmissions result.

 

*Ab obligatory “balancing the budget via death panels” joke is in order: after all, if hospitals have less of an incentive to treat the old and the sick, we’ll all save money, right?  I jest.  Morbid humour and all.

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Filed under Economics, Medicare/Medicaid, ObamaCare

McKinsey Survey: 30% of employers will stop offering health insurance in 2014

According to a survey by McKinsey Quarterly, approximately 30% of employers who provide health insurance to their employees will drop coverage after 2014, instead opting to pay a penalty and/or increase wages.

McKinsey explains that many employers will offer increased compensation to their employees if their health care plans are dropped; however, such thinking underestimates the ways in which employees undervalue their compensation packages.  On the average, employers spend 43 cents on benefits per dollar of payroll; however, employees only value about half of that. (Here is a comprehensive list of the non-payroll costs that employers pay.)   Should employers cut back on health insurance, their employees may demand a higher salary – but not high enough to cover their costs.

As conservatives, we often point out that employer-provided health insurance, matched FICA taxes, and unemployment insurance mask the true cost of those benefits. If employers dump their employees onto state exchanges, they can likely get away with offering less money in an increased salary than they had been paying out in employer-sponsored health insurance.  Employees who know the value of their benefits and make their salary requests accordingly may find themselves priced out of the market. It’s not a very employee-friendly result, but is a very likely one.

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Filed under Economics, Employer Mandate, ObamaCare

Pickering emulsified chocolate! My favourite!

Okay, not really, but chemists at the University of Warwick have created a chocolate-fruit juice emulsion with half the fat of regular chocolate.  (Hat tip.)

We demonstrate a route toward the preparation of healthier fruit juice infused chocolate candy. Up to 50 wt% of the fat content in chocolate, that is cocoa butter and milk fats, is replaced with fruit juice in the form of emulsion droplets using a quiescent Pickering emulsion fabrication strategy. [….]

The formation of a colloidal gel in the continuous (molten) oil phase provided the system with a yield stress, hereby giving it a gel-like and thus quiescent behaviour under low shear conditions, as determined by rheological measurements.

For my non-chemist readers, some of the cocoa butter is replaced with fruit juice, then emulsified (imagine shaking up your bottle of salad dressing) and stabilised.  Better living – and scurvy prevention! – through chemistry.

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Filed under Miscellanea

Unknown risks mean unknown costs

As part of his excellent analysis with the many flaws in ObamaCare, Richard Esptein explains the problems with mandatory issuance of insurance coverage and maximum allowable overhead.  Buried in here is an interesting actuarial and risk issue:

As those options are stripped from insurers, they may well find that their costs turn prohibitive as prospective customers flock to those health insurers whom they think will supply them with the best coverage, only to withdraw when their medical needs are satisfied. But it is an open question whether the premiums that they will be permitted to collect will be sufficient to cover the risks. [….]

To make matters worse, the current law stipulates that once the administrative expenses go above a government set minimum threshold, usually 15 or 20 percent of total costs, the insurance companies must make refunds to the payers. But just who are the payers?

Some of the reason that an insurance company may not pay out 80% of premiums as benefits, in any given year, is that one particular year had lower costs than normal.  Medical spending fluctuates every year, and those variances will be larger with smaller insurance companies.  (In fact, it’s statistically quite abnormal to have the same risk, and, with insurance, spending, every single year.)

Ideally, an insurance company would take extra money from a low-payout year and keep it for a high-payout year. (Yes, insurance companies will often use this extra money to pay out bonuses. Sigh.)  Under ObamaCare, however, insurance companies will be forced into “government accounting” – use it all in a single year, whether or not you need it that year.

This will only be exacerbated by the unknown risks associated with taking all comers and charging them the same amount of money (for the same age), regardless of health risks; increasing participation in the individual market, wherein risk is not spread amongst thousands of people; and the huge influx of people in and out of the private insurance market, first as they are required to purchase it, and then as they go on state-run health exchanges.

A sensible insurer would raise rates to ensure that it can properly cover any bills that are submitted by patients.  That runs directly counter to the purpose of the other provision, which is to limit the amount that an insurance company can take in without spending on health care.

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Filed under Economics, ObamaCare