Mish's Global Economic Trend Analysis |
- Ten Easy Obamacare Fixes
- Red Pill, Blue Pill, Cognitive Dissonance, Pavlov's Dogs
- Greek Polls Show Syriza on Cusp of Victory; Greek Political Party Analysis; Intentions Matter Not
| Posted: 05 Jan 2015 04:00 PM PST "Medicare for All" Problems In the past few days I posted reader responses to Single-Payer "Medicare for All" Proposal; Live and Let Die; Why Does Single-Payer "Work" in Europe? We heard from "Ken", a medical doctor in US Doctor Comments on Single-Payer "Medicare for All" Proposal. We also heard comments from "David" a US Expatriate living in Europe, and "Peter" a Canadian Expatriate living in the US in my post US and Canadian Expatriates Comment on US Healthcare. No Easy Solution? Peter from Canada says there are no easy solutions. I disagree. I believe there are plenty of solutions, some short-term, some long-term, all of them free-market based. Here are my eight proposals. 1. Freedom to Choose In the fearmongering preceding the Obamacare vote, Republicans trumped up the notion of "death panels" and healthcare rationing, the "R" word. The real issue is the "freedom to choose". For example: I do not want to be kept alive if I am brain-dead or nearly so. Moreover, if my odds of survival are low and I am going to live the rest of my life in misery following some accident or cancer, then let me go. In return, I should pay far less for a policy that allows just that, given that an inordinate number of expenses occur in the last few months of someone's life. The time to think about such issues is before problems happen, not after. Others may disagree with my choices. And that is fine. But, those who want to be kept alive with extraordinary procedures, and those who have less than two years to live yet expect major treatment, should pay for that privilege. Under Obamacare, healthy 20-year-olds pay excessively high rates, effectively subsidizing everyone else, whether that would be their actual choice or not. One size does not fit all. Nor do arbitrary distinctions Gold, Silver, and Platinum. The more services you demand, and the more circumstances in which you demand them, (Obamacare fails to address the latter), the more you should pay. 2. Non-Emergency Surgery Most major operations can be performed 50-80% cheaper in India, Europe, or the Caribbean. For example, heart surgery in the US that may cost $30,000 (or far more), can be had in India for as little as $8,000 (see my post on Medical Tourism). Except in the case of emergencies, such surgeries ought to be performed in the most cost-effective place. Want to demand healthcare treatment in the US? OK but you should pay for it with higher healthcare premiums. 3. Drug Costs It's time to eliminate drug import restrictions. There is no reason the US should be subsidizing prescription costs for the rest of the world. 4. Published Rates for Services When you go into a store to buy a coat, it has a price. When you go to a car dealer there is a list price that everyone bargains from. In contrast, most US consumers do not see the price for healthcare services. Worse yet, those who are above their yearly payout cap as well as those on Medicare with extended coverage, do not even care. While I do not propose the government pass laws that force doctors to publish rates, it would be easy enough for the insurance industry to demand doctors do just that so that people can shop around. 5. Network Doctors People like their own personal doctor. So do I. Want a non-network doctor? Under the current setup, you pay more for a non-network doctor even if that doctor is better qualified and willing to provide a service at a lower published rate! Surely there is room for improvement here, starting with published rates for services and the definition of "network" doctor. 6. Cost of Education The cost of education in the US is prohibitive. Then, following graduation, many doctors who do not go into private practice suffer through prolonged internship with low pay. By the time doctors start benefiting from their education, most are so overloaded with debt that they have to charge high prices to cover the cost of accumulated debts and interest. I believe we are undersupplied with doctors (wait times seem to indicate just that). I also propose the AMA wants to keep it that way. In fact, the entire healthcare industry wants to keep it that way because it eliminates competition and keeps costs up. More visas for foreign doctors, accreditation for US citizens educated in other countries, and elimination of student aid that does little but make debt slaves out of students would all help. 7. Non-Emergency Procedures Why does it take an MD to stitch a small wound or put a band-aid on a cut? There are many procedures that nurses could do at far lower cost. Yes, I realize we pay a doctor for diagnosis. Yet, I suspect many nurses would be at least as good as doctors on the diagnosis score, even if nurses cannot perform major surgery. I am not sure where the line moves, but I am sure there is adequate scope for moving the line as to what nurses and other healthcare professionals can handle. 8. Medical Fraud Medicare fraud is rampant. So is disability insurance. I have written about Disability Fraud at least a dozen times. 60 Minutes: Mainstream Media Finally Catches on to Disability Fraud: 60 Minutes Reports on "Disability USA" Steve Kroft on 60 Minutes reports on the alarming state of the federal disability program, which has exploded in size in the last six years and could become the first federal benefits program to run out of money. NPR: Unwilling to Work; 25% in Hale County AL Collect Disability, 14 Million Nationwide How Easy is it to Get Disability?States Promote Fraud: States Have an Incentive to Promote (Not Stop) Disability Fraud; So How Much Fraud Is There? This all goes back to 1996 when president Bill Clinton promised to "end welfare as we know it". He did indeed do just that, and fraud is the result.Results of Clinton Ending Welfare "As We Know It"
Dr. Timberlake asks a simple question to all his patients. "What grade did you finish?" If you claim "back pain" and do not have a degree, Timberlake believes you are disabled. Timberlake gets paid for his "analysis". States are willing to go along thanks to Bill Clinton who "ended welfare as we know it", creating an even worse disability fraud scheme in the wake. There has been no president since then willing to stop fraud at the Federal level. 9. FDA Federal Death Agency I was at a Casey conference last September and Doug Casey commented the FDA (Food and Drug Administration) ought to be reclassified as the Federal Death Agency. I do not recall his objections but here are a few things I have noted. Someone 80% likely to die of Ebola cannot get treatments that have worked in practice because the tests did not go to trial. Shouldn't this decision really be up to the individual? Instead of a common sense, free-market approach, senator John McCain, Czar Hater, Calls For Ebola Czar. In the opposite extreme, very expensive drugs get approved that offer no benefit over existing drugs. Doctors are pressured, even bribed by the pharmaceutical companies to prescribe these drugs. Third, many proven drugs are available in Europe that are not available in the US. Finally, many extremely expensive drugs (my deceased wife Joanne was on one of them for a year), at best extend life for a few months. In my case, Medicare picked up the tab, but I strongly question the benefits. I am talking about Riluzole (Rilutek). There seems to be lots of room for improvement in this problem actegory. 10. Be Your Own Healthcare Advocate My tenth item cannot be legislated, but it is important. Everyone needs to be their own healthcare advocate. I had my own experience that nearly lead to a $20,000 needless prostate cancer surgery that may have left me incontinent and impotent. Here are a couple posts on needless surgeries. The second one concerns me specifically.
The best ways to prevent needless surgeries are to become your own healthcare advocate, start questioning things, and get second or third opinions. 11. Tort Reform I mention tort reform not as one of my easy fixes, but rather because so many people raise the issue that I felt a need to comment on it. Tort law is what allows someone to sue for damages. The biggest proponents of tort reform are industry groups that wants to bear little to no responsibility for unsafe products. Remember Ford Motor Company's exploding Pinto gas tanks and Firestone Tire Company's exploding radial tires? Have we forgotten the devastation wrought by unsafe drugs like Thalidomide and Vioxx and products like the Dalkon Shield? Inquiring minds may also wish to consider Why Conservatives Should be Against Tort Reform. In general, pharmaceutical and insurance companies are the biggest proponents of tort reform. Both stand to gain even more than doctors from shielding. While I sympathize with doctors regarding the high cost of malpractice insurance, government mandated caps are not the ideal solution. Easy to Fix Those who claim health insurance is "hard" to fix are mistaken. The ten ideas mentioned above are easy enough to implement. Every one of them is a free-market solution that is also compatible with Obamacare! The 10 items I mentioned are just the beginning. And all of them are compatible with socialized healthcare even though I am sure that is not optimal. Every one of them involves increased competition or more patient awareness. Making healthcare both better and more affordable is easy. Finding the political will to cooperate in fixing the problems is what's hard. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Red Pill, Blue Pill, Cognitive Dissonance, Pavlov's Dogs Posted: 05 Jan 2015 11:17 AM PST I received an email a few weeks ago stating "Hussman has been so wrong I should stop quoting him." Nonetheless here I go again, because I think Hussman has something important to say. Please consider a few admittedly lengthy snips from his post today Pills for Cognitive Dissonance in a Speculative Bubble. Several years of persistent yield-seeking speculation provoked by zero-interest rate monetary policies have created a fertile ground for cognitive dissonance. On one hand, any observer with historical perspective knows not only that the overvaluation from this kind of speculation inevitably ends in tears, but also that the heavy issuance of new speculative and low-quality securities during the bubble finances and enables unproductive malinvestment that leaves the economy far worse off in the end. On the other hand, prices have been advancing.Pavlov's Dogs My take on the switch by Hugh Hendry is along the lines of Pavlov's Dogs Classical Conditioning. In his initial experiments, Pavlov rang a bell and then gave the dog food; after a few repetitions, the dogs started to salivate in response to the bell. Pavlov called the bell the conditioned stimulus because its effects depend on its association with food. As related to the stock market, every time stocks dipped, bears thought "this was the one". Yet, every dip was nothing more than a bell-ringing buy opportunity, often times coupled with lovie-dovie statements by someone on the Fed. Even minor dips were bell-ringers. Finally, at long last Hendry has been trained. Right on Cue And sure enough, right on cue today, San Francisco president Fed's Williams says Rate Hikes Should be Gradual Because Economy Still Needs Help. Whether Williams is purposely attempting to smooth the stock market is subject to debate. What's not subject to debate is past reactions. Many stock market reversals over the past few years have come from similar Fed statements. Today we don't see one, at least yet. Curiously the dollar and gold are both up. The Dow was down over 300 point but has recovered a bit. As always, one day proves nothing. But that's the problem for those on the blue "buy the dip" pill isn't it? One never knows when this is the dip that isn't bought. When the final dog has been trained, the pool of dip buyers is exhausted. Yet, investors (aka fully trained dip buyers), keep expecting reversals that don't come, deploying more and more cash all the way down. Was Hugh Hendry the final dog? Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Greek Polls Show Syriza on Cusp of Victory; Greek Political Party Analysis; Intentions Matter Not Posted: 05 Jan 2015 12:34 AM PST In spite of recent fearmongering by Germany and New Democracy leader Antonis Samaras, polls still show Syriza (radical left) leader Alexis Tsipras in the lead for Greek Prime Minister. Syriza's lead has generally been shrinking, but all of the polls have Syriza in the lead. Polls are pretty volatile. Leads swing from 3 to 10 points depending on polling organization. Wikipedia has a nice summary of the Greek Election on January 25. Party Results  click on chart for sharper image I highlighted three polls by Rass and three by Palmos Analysis. The former all seem on the low sided in respective time groups and the latter on the high side. There is certainly a difference between a 3 point lead and a 10 point lead. But the important factor is all the polls are in agreement. Unless and until that changes, the odds for Syriza are likely better than the polls indicate. Seats  Note the huge disproportionate seat total for Syriza over New Democracy. Greek election law gives 50 seats to the party that receives the most votes in the general election. Small parties need to reach an electoral threshold of 3% in order to be represented in parliament. Coalition Forming It takes 151 votes to reach a majority. If the smaller parties are bumped off it may be impossible for Syriza to form a coalition government should it fall short of a 151 seat majority. In an effort to prevent Syriza from gaining enough seats (or perhaps out of political arrogance), former Greek prime minister, George Papandreou, revealed plans on January 2 for a new political party, the Movement of Democratic Socialists. This purportedly will take leftist votes from Syriza. But it may also ring the death bell Papandreou's former party Pasok, currently only polling 2.2-4.3% in the four most recent polls. Greek Political Parties Syriza: Coalition of the Radical Left: a left-wing political party in Greece, originally founded as a coalition of left-wing and radical left parties. The coalition originally comprised a broad array of groups (thirteen in total) and independent politicians, including democratic socialists, left-wing populist and green left groups, as well as Maoist, Trotskyist, eurocommunist but also eurosceptic components. Anel: Independent Greeks: Greek rightist anti-austerity political party ND: New Democracy: The party's ideology was defined as "radical liberalism," a term defined by New Democracy as "the prevalence of free market rules with the decisive intervention of the state in favour of social justice." Pasok: Panhellenic Socialist Movement: A democratic socialist party founded by Andreas Papandreou in September 1974. In 1981, Pasok became Greece's first left-of-centre party to win a majority in the Hellenic Parliament. XA: Golden Dawn: Scholars and media have described Golden Dawn as neo-Nazi and fascist though the group rejects these labels. Members have expressed admiration of the former Greek dictator Ioannis Metaxas of the 4th of August Regime (1936–1941). They have also made use of Nazi symbolism, and have praised figures of Nazi Germany in the past. According to academic sources, the group is racist and xenophobic. The party's leader has openly identified it as nationalist and racist. Dimar: Democratic Left: a social-democratic political party in Greece that splintered when various leaders left or were kicked out of the party for failing to vote for austerity measures. KKE: Communist Party of Greece: A Marxist-Leninist political party in Greece. It was Founded on 17 November 1918 as the Socialist Labour Party of Greece. It is the oldest party in the Greek political scene. Potami: The River: The party was launched on 11 March 2014, by TV presenter Stavros Theodorakis. The party has been described by the media as pro-European, inspired by social democracy and liberalism and relying heavily on Theodorakis' personal popularity to attract voters. Kinima: Movement of Democratic Socialists: A new centre-left political party announced on 2 January 2015 by George Papandreou, current President of the Socialist International, outgoing Member of the Hellenic Parliament and former Prime Minister of Greece. Pasok officials immediately denounced Papandreou's move as an "unethical and irrational political act" which they said to be aimed at fracturing Pasok and motivated by personal ambition rather than any "real" political disagreement. Coalition Possibilities One might think Syriza could easily find coalition partners among all those socialist possibilities, but that's not the case. Syriza wants to restructure the bailout and end the austerity. Interestingly, that was the position of various opposition parties until they formed a government. Once in power, they all started dancing to the tune of the Troika polka. Golden Dawn is a genuine anti-euro possibility but a radical left and radical right group will not work out so well as partners. Could such a weird coalition form if only for a brief while for Greece to make demands on Germany? I don't know the answer to that, but politics does make strange bedfellows as we have seen with the US handling of ISIS. More Elections? Suppose New Democracy wins by a very tiny margin with 85 seats outright and say another 50 simply for getting the most votes. Could Samaras pull together 15 more votes to form a coalition? If so, how fragile will it be? The same question applies to Syriza. What kind of deals will it take to form a coalition if Syriza is a few votes short? If no one can form a coalition, or a coalition quickly breaks apart, more elections will be needed to decide. That's a distinct possibility with this motley group. If you were looking for a reason over 70% of Greeks want to stay with the euro, take a look at the political parties who have been looting the country. Still, what cannot be paid back, won't. Intentions Matter Not I seldom find myself in agreement with anything socialists say, but Alexis Tsipras has it nailed when he says "on a realistic basis Greece requires a remission of debt because the debt objectively cannot be paid." (Translated from Libre Mercado: Tsipras Syriza insists on "a remission of most of the debt") I also seldom agree with Eurointelligence and Financial Times writer Wolfgang Münchau. Today I do. Here are a few paragraphs from his recent column Political extremists may be the eurozone's saviours that I endorse 100%. The official EU policy towards Greece is best described as debt forbearance — of recognising a debt problem, and delaying the inevitable. It is also the policy of Antonis Samaras, the Greek prime minister, and his coalition government. It is a version of extend-and-pretend: extend the loans, and pretend that you are solvent. The history of international debt crises tells us that these strategies are always tried, and always fail.I fail to understand how this setup of political extremists "saves the eurozone" as the headline implies, nor did Münchau explain. However, I am in tune with his general message as well as his prediction "The probability of at least one political upset in 2015 is very high indeed" For further discussion and analysis, please see Competing Views: Grexit Would Be "Lehman Squared" vs. No Problem; Where to Point the Finger When it Blows. Where to Point the Finger When it Blows The pot is simmering and is likely to boil over at any time. When it does boil over, Greece will not really be to blame, even if Alexis Tsipras wins the election and carries out his threats. Rather, be prepared to point the finger at the EU, ECB, and IMF for their collective insistence that Greece, Spain, Italy, etc. repay debt that cannot and will not be paid back. By the way, there is a small chance Tsipras wins the election and Greece exits the eurozone with limited initial fallout. If so, the major problem will come when Spain or Italy does the same thing. With that, it appears Münchau and I are singing the same tune. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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