Category Archives: dignity

Quote of the day

Marcus Davies, an official of the Saskatchewan Medical Society, on the difference between Canadians and Americans:

Us Canadians, we’re kind of understated by nature.  We don’t go around chanting ‘We’re No. 1!’ But you know, there are two areas where we feel superior to the U.S.: hockey and health care.”

The quote comes from an article in Newsweek by T. R. Reid, the guy who put together a documentary about healthcare around the world for PBS about a year ago.  Reid says that countries typically develop healthcare systems that reflect their national character and Canadians have built a system that neatly fits theirs: “ferociously egalitarian, but thrifty at the same time”.

So where’s the American national character on this issue?  Hugely confused, I’d say.  Americans are not radically less egalitarian or thrifty than people in other countries.  Unfortunately, many Americans think that their fellow citizens can get all the help they need though emergency rooms and charity.  Or that unregulated free markets are the answer.  Or, even if they aren’t the answe,r government intervention will just make it worse.  Thus, contrary to the example of virtually every developed country around the world, we are doomed to deliver healthcare in an unethical and wasteful way.

Even after months of debate and publicity it seems that large numbers of Americans have little idea what happening around the world or in their own country.  Lovely.

Update:  according to Bob Laszewski we Americans are confused about another matter:  we think the healthcare we receive is generally based on scientific evidence, when it’s not.

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Filed under brain dead media, dignity, healthcare finance

Welfare through the looking glass

The New York Times Economix blog reminds us that the word “welfare” hasn’t always had negative connotations:

…“the image of the poor person in the 1930s was the agrarian farmer, down on his luck, but not complaining.” Think of Tom Joad, the protagonist of John Steinbeck’s novel “The Grapes of Wrath.”

Starting in the mid-1960s, however, that image began to change: poverty –- especially welfare — became seen by many as largely an African-American phenomenon. It was also during this decade that the word “welfare,” which previously did not have a negative connotation, became “a political epithet.

As the blog notes, however, poverty wasn’t actually a “largely African-American phenomenon”.  There have always been more whites than blacks on welfare.  The blog blames this misperception on “the media”.

I suppose that’s plausible.  But where did the media get the idea?  My bet would be that they got it from the conservative political movement.  Conservatives have always disliked social programs and discovered decades ago that they could disrupt them and defund them by appealing to racial fears and hatreds.  Not incidentally, this gained a lot of votes too  (see Nixon–southern strategy; Reagan—welfare queen).

By promoting the “misperception” conservatives did indeed end the federal government’s primary welfare program, Aid to Families with Dependent Children (AFDC) by enacting the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Henceforth there would only be Temporary Assistance to Needy Families (TANF).

Twelve years later we realize that the “misperception” about race and poverty wasn’t the only thing we didn’t understand about the conservative approach to welfare.  Not only did they transform welfare for the little guy.  They transformed it for the big guys, too.    The wealthy and powerful have always received outsized welfare payments in the form of subsidies, protection from competition, and so forth.  But under the new conservative plan, the wealthy began to receive massive public assistance.  Consider the 2003 Medicare Modernization Act, the 2005 Energy Act, two major tax cuts, just for instance.  As the Bush years came to a close the federal government was presiding over perhaps the largest welfare program ever attempted.  None of it temporary (or at least not intended to be).  None of it contingent on work or need.  None of it contingent on the existence of children–dependent or not.  And the vast majority of it benefiting the rich.

Of course, none of the programs were called “welfare”.  It wasn’t Aid to Pharmaceutical Companies in Need of Executive Bonuses Act, or Exxon Relief and Responsibility Act, or the Wink and Nod as Financial Executives Loot a Housing Bubble Act.  But it was welfare nonetheless.   However the recent economic downturn and collapse of the capital markets has made it more difficult to disguise the welfare payments.

Investment bank and insurance company executives who last year extracted hundreds of millions in cash out of their businesses based on what we now know were phony paper profits, now prostrate themselves before the taxpayers, begging for relief.  And the relief is in the hundreds of billions of dollars in guarantees and cash infusions.  By way of comparison the TANF program operates out of the government’s petty cash fund, costing taxpayers a mere $16.5 billion per year.

The spectacle would seem ludicrous except that the executives demanding the bail outs know they hold the economy hostage.  “Fork over the dough, buster.  Or the economy gets it.”  I think organized crime perfected this technique long ago.  First, seize control of a company, max out the credit lines and pay the cash to yourself; then torch the place, collect the insurance money, and walk away.  The CEOs appearing before Congress are at the insurance collection stage (“we need the money to rebuild—for the good of everyone!!”).

If this keeps up, welfare for the wealthy could start to develop some negative connotations.

Fortunately for the conservative movement, their welfare/extortion scheme is unraveling at exactly the moment that they have been relegated to minority status throughout government.  Thus they can return to doing what they do best:  complain about irresponsible government spending (welfare!) without having, as Sarah Palin might put it, actual responsibilities

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Filed under corporate welfare, dignity, radical right

Kicking off the Death Spiral

Beware the individual health insurance market (yes, that’s the market McCain wants to push millions of people into). Consider this situation: let’s say you do the right thing and buy an individual health insurance policy when you’re healthy, pay premiums for years, then get sick.

The insurance company pays the initial claims, but they certainly don’t want you on their policy forever. You’re costing them a load of money and they are in business to make money. The logical thing to do would be to just cancel your policy at the annual renewal, but that’s illegal in all fifty states. They can only raise premiums to cover the costs of everyone on that individual plan. What to do?

Here’s an idea, as described in ConsumerReports Health.org:

Companies also control their risk by using a maneuver known as closing a block or book of business. They stop accepting new customers in a plan, which kicks off a process known as a “death spiral.”

Even if everyone in an insurance plan starts out relatively healthy, as time goes on, people get sick, and the cost to insure them rises. Once the pool is closed, costs for the remaining members rise inexorably. Healthier members find cheaper plans, but sicker ones are effectively forced out because they can’t afford coverage.

Once that process gets going, premiums on individual health insurance policies can rise at a breathtaking rate.

And they have an example:

Jesse Paul, 59, an Indianapolis lawyer, paid $25.50 a month for his individual, $100- deductible Prudential major medical policy when he took it out in 1980. Premiums rose steadily for years but at a pace that Paul deemed “rational in terms of medical costs.” In 2003 the premium shot up from about $1,200 to about $1,900 a month at renewal.

When Paul complained to the state insurance department, he learned that the policy had been closed to new entrants for years, that he was one of only 400 to 600 customers left in the state, and that the premium increase was permissible under Indiana law. Paul reached his breaking point when he got his latest renewal notice in August; the monthly premium was now $4,284. He quickly found out he was uninsurable on the private market because he took medications for high blood pressure, high cholesterol, and allergies. He is now insured by the Indiana high- risk pool for a premium of $650 a month.

If only Charles Dickens were alive and writing about the American healthcare industry.

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Filed under dignity, healthcare finance, slimy marketing, social insurance

Hanging out at McCain 08

Over at McCain 08 website I clicked on the “Issues” tab and was surprised to see the category “Human Dignity”. This seems like “touchy-feely” liberal category to me, so I’m seriously wondering what it could be about. I know McCain’s a maverick so who knows. Maybe it’s about

As it turns out Maverick McCain doesn’t mention any of these. His #1 Human Dignity agenda item is overturning Roe v. Wade and “returning the abortion question to the states”. After that he wants to “end abortion at at the state level”. As to how that will be accomplished–he’s a bit fuzzy on details (“To effect meaningful change, we must engage the debate at a human level.” ).

Presumably he doesn’t want to lock up women and doctors—that would be undignified. Then again the back-alley, black-market in abortions that would inevitably develop doesn’t sound too dignified either.

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Dealing with Malcontents

Frontline’s “Sick Around the World” presented an informative view on the different approaches to healthcare in rich countries around the world. In a webcast discussing the different systems Uwe Reinhardt, professor of health economics at Princeton, emphasized the ethics involved. He said they fell into three categories.

  1. healthcare is available to everyone on an equal basis and financed by ability-to pay (the Taiwan-Canada approach).
  2. #1, however a small, wealthy elite is allowed to opt-out of the universal system and get their own coverage (the European approach.)
  3. healthcare is a private consumption good to be rationed on the basis of ability to pay (the United States.)

As to why Europeans have developed #2, a system in which wealthy elites can opt out, Reinhardt says

“some say it’s a design flaw, and in some regard it is, however it’s a safety valve. You want to get the malcontents out of the system. So they can have their own thing and for the 90% of the rest of us we can do our thing”.

I suspect that is exactly what will happen in America if we are ever to get universal coverage. The wealthy malcontents will have to be bought off.

Reinhartdt’s ten minutes on this webcast is awesome. His emphasis on the ethics healthcare and the right of everyone to dignity is inspiring. Listen to it here.

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It’s the solidarity, stupid!

Maggie Mahar has an interesting post on why we don’t have national healthcare.

“[inequality], says Princeton economist Uwe Reinhardt, is what makes health care reform so much more difficult in the U.S. than in countries such as Finland, Canada, Belgium, the Netherlands, Switzerland, Sweden, France, Denmark, Germany and Norway. In these largely middle-class countries, the gap between the most affluent and the least affluent is much narrower… . When you compare the incomes of the top 20 percent to the bottom 20 percent in most developed countries, the ratio is less than 6:1 ; in the U.S. the ratio is roughly 9:1.

Why do narrower income gaps make it easier to build a universal health care system? In countries where most people are “middle class,” groups living on different rungs of the income ladder still identify with each other. Some earn more; some earn less—but they are not living in different worlds. As Princeton economist Uwe Reinhardt put it at the World Health Care Conference in Berlin earlier this month, in countries like the Netherlands and France, there is more “solidarity.”

By contrast, in the U.S, Reinhardt pointed out, the divisions are much sharper. “We have our fabulously wealthy ‘corporate aristocracy’—people who are not part of the U.S. They don’t participate in American life anymore; they have five homes all over the world.” Then we have a class of very affluent families… . Move down another rung or two and you find an entirely different world of middle-class Americans. This group covers a wide swathe of society ranging from those who are “comfortable” to those who worry about making the mortgage, sending their children to college, and paying off credit-card debt. Then finally, says Reinhardt, “America has its very poor—these are the people who were in New Orleans when Katrina hit, and who receive no services.”

Following his lecture, I asked Reinhardt whether he thought that, if we made a real commitment to healthcare reform, the U.S. could build a system that provided high-quality affordable care for most Americans. I pointed to Germany, where even though affluent citizens (earning over roughly $75,000 a year) have a choice between public-sector healthcare and more expensive private insurance, the majority of wealthier Germans pick the public system. It’s good enough that they are satisfied with the quality of care. Couldn’t we do something similar in the U.S.?

Reinhardt didn’t hesitate: “No, never.”

Why not? I asked

“Because there is no social solidarity in the U.S.”

And why don’t we have solidarity? The legacy of race and slavery is no doubt one reason. It’s possible to win elections in the US by pitting one ethnic group against the other and one economic group against another. Given the country’s ethnic diversity its not entirely hard to believe that solidarity would be hard to achieve. Still, the country was founded on the idea that all men are created equal, that they are endowed by their creator with certain inalienable rights…

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Filed under dignity, healthcare finance, junglenomics

Basic Income

I see the Canadians (or at least progressive Canadians) are considering a Basic Income policy. It would work like Social Security does in this country—delivering a fixed payment to each household regardless of need. Except that Basic Income would extend benefits to everyone—not just the older folks. The idea is that a wealthy country should provide a income floor below which no one should fall. Before you have an attack of the creeping-socialism vapors, consider some of the benefits of such a program:

1. an end to poverty. Currently 36 million Americans—13 million of them children—live in poverty (defined as income of $20,614 for a family of four)

2. none of the stigma attached to “means tested” programs—-it’s not based on need; everyone benefits

3. administrative simplicity; no elaborate bureaucracy to determine eligibility or track down “welfare cheats”. It would eliminate the mishmash of current social programs and their professional fundraising expenses.

4. no disincentive to work—or at least not as much as traditional welfare programs–since working does not reduce your basic income.

A Canadian economist has modeled the idea and thinks its “such a good idea its hard to figure out why we don’t have it already”. I thought I’d check out American think tanks to see if anyone in America has a similar proposal.

No luck. Couldn’t find one; although its possible I didn’t search long enough. I got stuck at the New America Foundation, a centrist-y think tank that I thought might have some thoughtful work on the subject; they did have a piece entitled Rethinking Social Insurance that sounded promising. But my goodness, what a mishmash disinformation and propaganda. Here’s the opening statement:

The single greatest threat to the fiscal health of the United States is the runaway growth of the nation’s major retirement and health care entitlement programs.

Not according to the CBO—it’s healthcare costs, not “entitlements” in general that threaten “fiscal health”.

I could go on criticizing the piece (and maybe I will in a future post), but suffice it to say that in America—or at least at the New America Foundation—we get tired old fear mongering about public policy instead of “new thinking”.

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