Monday, November 19, 2018

Every part of health care industry is accusing the rest of ripping you off

To understand why American spends such a shocking amount of health care you don’t need a degree in economics or even a strong understanding of the numerous laws which govern our system. All you need to do is listen to what every part of the health care industry is saying about every other part. On twitter the industry is pointing out how basically every part of the system use their market/legal/political power to rip you off.
Insurers blame drug makers, hospitals, physicians groups, and individual doctors
For example the health insurers are repeatedly blaming the drug companies for exploiting their government granted monopolies to “price gouge” sick children and their desperate parents. Price gouging the insurers claim is because the drug makers known people have no alternatives.
The insurers also blaming the hospitals,  physician groups, and doctors for taking advantage of people in the emergency room. When people are at their their most vulnerable, can’t shop around, or even say no; insurers are pointing out hospitals and doctors take advantage of people by charging ridiculous prices.
Drug makers blame hospitals, doctors and insurers
Of course the finger pointing goes both ways. The drug makers blame the Pharmaceutical Benefit Managers (often own by insurers) for high cost. They blame the hospitals for marking up medication by as much as 700%. They also point out that most of rapid growth and health care spending is really been drive by the high prices for hospitals and doctors.
The hospitals blame the drug markers and Pharmaceutical Benefit Managers
In turn the hospitals are blaming the drug makers and PHB for charging too much. Pointing out insane price increases that is currently take place. In fact the hospitals are so convinced that “Big Pharma” and PHB are a ripping people off they created their own non-profit drug company, Civica Rx. An organization that comes very close to accusing drug makers of putting people lives at risk for profit.
Physician groups blame insurers
Physician groups are blaming people’s financial difficulties on insurers refusing to pay the high prices they demand. Leaving people with crushing surprise bills.
The simple fact is that they are all right to a large degree. When the health care industry itself keeps telling us the system if full of price gouging, monopoly exploitation, and abusive practices we should believe them.

Tuesday, September 4, 2018

Can Democracy survive space?

The recent political “debate” over climate change and the lack of action has got me thinking about how something similar would play out in space. It has left me wondering if democracy is even possible in space. A question I would love to see more explored in literature.

The big benefit of a democracy is that eventually it tends to make decent decisions. However, it tends to move slowly. It is great at muddling through an issue while importantly avoiding horrible decisions.  On Earth this is fine because most of the very important stuff will keep happening no matter how gridlocked or misguided the politics becomes. The rains will keep falling. The trees will keep turning carbon dioxide into oxygen. The rivers will keep flowing, etc.

Even with an issue like climate change, where there is significant talk about whether we have reached a “tipping point,” that tipping point is really bad but not the-end-of-all-life bad. Even with big temperature increases, life will still exist. The suffering will be significant, but we would still have a chance to take dramatic action to adjust and correct.

In space it is different. On a colony on Titan or a generation ship to Alpha Centauri there is little margin for error. If people don’t believe the experts' predictions about how many more years the air scrubbers can run without a major overall, there is no second chance and the consequence is everyone dies. In space, if a democracy handled a similar issue the way we have climate change, it would be the end of all life in the colony.

It is possible that these environments are as a result going to naturally gravitate to highly authoritarian systems. Or if there are democracies, they might form with the creation of a parallel power structure controlled by engineers or an unquestionable AI. This power structure could have an almost mystical role, much like the Church in medieval Europe, with its own rules and laws.

Monday, August 6, 2018

Is the Medicare For All we want Australian?

While the American left debates what the term “Medicare for All” really means, it would be worthwhile to look at Australia’s program also known as Medicare. After studying the issue for years, I’ve come to think the unique features of Australian Medicare might just be the version of Medicare for All that American voters might actually most support.

In some ways, Australian Medicare is well to the left of Sen. Bernie Sanders’ (I-VT) Medicare for All Act of 2017, and in other ways it is to its right. Australia's system has a much higher degree of government ownership of hospitals but leaves a somewhat larger role for private insurance.

How it works

Under Australian Medicare everyone is covered, and health care is free at point of service as long as you go to a doctor who accepts the Medicare rate as full payment (most do) and only use the public hospitals. The public hospitals provide quality, no-frills health care (such as shared rooms instead of private rooms) with modest waits. An individual would be perfectly fine if they got all their care under this free system, and many do.

Australia also has many private hospitals that you can buy private insurance to pay for. These facilities provide short waits, greater provider choice, and perks like fancy private rooms.

The most interesting part of the Australian Medicare system to me, though, is how rates are set. The government sets a reimbursement rate it is willing to pay for a given service. Doctors at private offices can choose to accept the Medicare rate as full payment when they see a patient and are encouraged to do so with a bulk billing incentive. If they do, the patient pays nothing. Alternatively, the doctor can choose to add an additional fee that the patient needs to pay, only if the patient is clearly made aware of the additional fee in advance (so no surprise ER bills or similar nonsense). People can buy insurance to cover these additional fees.

The bulk billing incentive combined with the administrative hassle that is inherently created for any doctor's office if they choose to charge co-pays means the vast majority of provider visits are free.

Australian Medicare: three advantages

Fee negotiations strategy - One perennial issue with any government insurance program is choosing provider rates, and there is no one clear best answer. No matter how high the fees are, providers are always going to claim they aren’t high enough. For example, hospitals in America constantly claim to be losing money on Medicaid and Medicare patients despite all the economic evidence against cost shifting. Providers will try to scare the public with claims that low fees will result in a lack of appropriate care or rationing. These are actual potential concerns if rates are truly too low, but providers will claim they exist regardless, making it difficult to separate the noise from reality.  

Letting doctors charge more than the set rate while financially encouraging them not to is one tool to help with this fee-setting issue. It serves both as a relief valve and a warning system, as well as a bullshit detector.

As long as a majority of doctors accept the fee as full payment, it is a strong indication the fee is sufficient and that providers' attempts to get more money should be ignored. If for any procedure a majority of providers start charging a co-pay, it is an indication the fee might be too low and should be raised. It also means that if any fee is too low, the response would be more new co-pays instead of blunt, across-the-board reductions in the procedure.

Low cost - The Australian Medicare system doesn’t place a high value on giving people a choice of hospital or making sure every single provider is in the public system. Instead it focuses on making sure everyone can get access to necessary care somewhere. This lets Australia provide everyone with free care really cheaply. Australia spends a lower share of GDP on health care than Canada. There is strong evidence that most people would happily choose a system with less provider choice in exchange for lower costs. For example, among people who qualify for TRICARE, consumers overwhelmingly pick the less choice/lower cost option. In polling twice as many said their top priority for health care was reducing cost instead of increasing consumer choice.  

Channeling the rich people’s need to be special instead of fighting it - One thing that does not get talked about enough by single-payer supporters is that rich people are remarkably determined to get the "better," more expensive version of everything, even if it is in fact not better at all. People with money are also remarkably clever about finding ways to use their money to get the "better" option. A system can either actively try to fight this dynamic, or it can try to channel it in a less disruptive way. Many single-payer advocates in the United States want to try to fight this dynamic.

Fighting it can be very hard. Even in Canada, which has likely tried the hardest of any country to make their health care egalitarian, there are membership-based private clinics which function very much like private insurance. These raise a real problem. Rich people in Canada use their access to private clinics and private lab work to effectively cut the line for hospital services. As a result, the choice countries really face tends to be either letting the rich using their money to cut the line or creating a system so the rich at least fully pay for their own private line. Most single-payer countries around the world tend to have some form of private system that around 10% of the population uses.

While Australia promotes private insurance more than I think is optimal, I think channeling this rich-people impulse rather than fighting it is the better policy decision. If rich people want to waste their money on going to hospitals with fancy marble lobbies or paying for the privilege to serve as guinea pigs to test out new experimental treatments, I don’t think it is worth spending  political capital to try to stop them.


If Medicare for All comes to America, it very well might be the Australian version. By focusing on its main goal, Australian Medicare can provide everyone with free at-point-of-service care at an incredibly affordable price. It also has a fee system which does a good job of dealing with the most difficult problems of any single payer proposal in America: choosing the right reimbursement rate and dealing with people who insist they get the better option.

Monday, July 16, 2018

Business shorts and why I'm very pessimistic about climate change

Climate change is a very real and serious problem. Fully addressing it is going to take powerful leadership and quite frankly sacrifice. Most major plans to true deal with the issue will require the general public to pay more for energy, transportation, and/or change their lifestyle in ways they do not want. Ways that on net will make people somewhat worse off since they will need to pay for the pollution they created which up till now has been mostly free. Yet despite the challenge what makes me most pessimistic is not the political rhetoric or the need for collective sacrifice but fashion.

There is one amazing truly win-win-win thing we could do the help with climate change, business shorts.

Six percent of all electricity produced in the United States is used on air conditioning. If men were encourage to wear business shorts during the summer instead of long pants or comically impractical wool suits, we could reduce that number. It would be a win for businesses and organization who get to spend less on AC. It would be a win for the planet. Finally, It would be a win for the people in the shorts. Having lived in both the DC and NYC region having to go to work in full pants when it is over 95 degree with 80% humidity is torturous.

Yet for some reason business shorts aren’t widely adopted. Most importantly the top business leaders, non-profit organization leaders, and politicians who claim climate change is a massive threat are still walking around DC in business suits in the middle of summer. They think we need bold action and shared sacrifice, but they aren’t even willing to risk looking unfashionable even it if could save the planet while making the so much more comfortable. Our leaders would rather let the planet burn and live with swamp ass than having people see their calves.

If our leaders aren’t going to make this most minor of personal sacrifice for the goal and first try to push society to adopt these win-win-win solutions, I have no optimism we can ever do the hard stuff. When I finally see a senator in shorts this summer I will believe we are taking climate change seriously.

Thursday, April 26, 2018

Medicare for all Madlibs: Nomenclature for Democrats' new health plans

The good news is that Democrats are trying to expand public health insurance to more Americans. The bad news is they have almost a dozen plans to expand coverage with the word “Medicare” in the title, creating a rhetorical nightmare. So I created this helpful nomenclature to simply describe what the different plans do.

These three areas are not the only places plans differ, but they represent the most important policy disagreements over which much of the political debate will likely take place: Whether or not everyone will have access to the new program, whether or not private insurance will be allowed to continue to exist, and how cost sharing will be involved are the big differences among Democrats right now. Names aside, these are the details that matter.  

Universal - Everyone can access it if they want
Limited - Only certain people due to age, income, location or employment arrangement are allowed to take part
Buy in - An individual or company would need to actively choose to use the program
Opt-out - If an individual did nothing they would be automatically enrolled in a new public insurance program, but they could do something to choose private insurance instead.
Only - The new Medicare program will be the only basic health insurance for people; private insurers would be forbidden from offering duplicate coverage.
Free at point of service care - No copays, coinsurance or deductibles for coverage benefits
Nominal cost sharing - Nominal co-pays for some services
Traditional cost sharing - Co-pays, deductibles, and/or coinsurance similar to current Medicare and many employer-based plans.

For example:
  • HR 676, the Improved and Expanded Medicare for All, is Universal Medicare Only with Free at point of service care 
  • The Center for American Progress’s Medicare Extra for All is Universal Medicare Opt-out with traditional cost sharing 
  • Rep. Brian Higgins’ Medicare Buy-in Option Act is an age limited Medicare Buy-in with traditional cost sharing

Here are most of the current plans to expand public insurance, and almost all have a title of Medicare. By 2020 there are likely to be at least a half dozen more:

Thursday, February 1, 2018

Predicting the news cycle in every state post marijuana legalization

Now that several states have legalized marijuana, it has become almost comically easy to predict how the news cycle will develop in each new state. It always follows this basic pattern:
We are now getting to see the pattern start all over again in California.

Tuesday, January 23, 2018

My four year-old marijuana prediction was off by just three weeks

Vermont has become the ninth state to legalize marijuana and the first state to do so via the legislature instead of a ballot measure. So I'm going to take a moment to toot my own horn.

Back in January 2014, I published After Legalization: Understanding the future of marijuana policy. In it, I predicted that by 2018 roughly nine states would have legalized marijuana and that Vermont was likely to be the first to legalize marijuana via the state legislature. I also predicted Canada was likely to be the first major country to move forward with legalization in 2017.
2017 –This is when the fight is likely to move from the ballot to the state legislature. After voters in multiple states approve legalization, politicians in other states will feel comfortable backing the idea—or political pressure will force them to approve it. It's very likely that Vermont, Hawaii, and Rhode Island will move forward with marijuana legalization in early 2017 or 2018. They are three of the most liberal states in the country and have a history of being progressive on marijuana reform: Hawaii was the first state legislature to adopt medical marijuana, Vermont was the second, and Rhode Island was the third. I also expect the changing political environment created by a wave of victories in 2016 to push many state legislatures to adopt smaller reforms, such as reducing their penalties for simple possession.
At the same time, several foreign countries will probably adopt legalization. The political situation in Canada regarding this issue is worth watching, because it could put some real pressure on the United States to finally act. In 2013, the leader of the Liberal party of Canada endorsed marijuana legalization,i and there is a very good chance his party could win back control after the next federal election likely to take place at the end of 2015. If the Liberals are serious about moving forward with marijuana reform, a smart time to do it would be right after the United States’ 2016 election, when several American states on or near the Canadian border are likely to legalize marijuana.
While not every one of my predictions has been perfect, I'm very happy with how well I have done so far. One my biggest mistakes was that I thought the District of Columbia wouldn't legalize until 2020 because people in the District would be too afraid of Congress interfering. The people of the District did approve marijuana legalization in 2014, but Congress stepped in to block the city from adopting a regulatory model -- so I got it half right.