There is More Than One Place We Can Petition Our Government

Posted on April 28, 2020 | 1 comment

PoliceCarOn Covid-19 business closures this may be the agency to direct our appeal

 

America has a problem. More particularly, Pennsylvania has a problem far beyond Covid-19 itself. This is a problem it created. This is a problem it will not confront or assume responsibility for causing.

A dictatorial governor along with an unqualified Secretary of Health, have, in monkey see-monkey do fashion, followed the fear driven overreactions of other mostly blue states. As evidence mounts that the virus is not nearly as lethal as some initial projections suggested and concerns over hospital capacity have evaporated, they remain locked in and Pennsylvanians remain locked down.

This has caused and is continuing to cause a cascade of collateral damage that itself is harming health and sometimes ending with its own deadly outcomes.

A solidly Republican legislature has produced bills to lessen the top down oppression, but a governor-king, who has avoided consultation with the people’s representatives, has thrown up his veto wall. The legislature lacks the numbers to override.

So where are citizens to turn? The first amendment guarantees the right of the people “to petition the government for a redress of grievances”. We can contact our legislators, as we should, but it’s apparent that an intransigent governor will blunt their efforts.

Then it dawned on me that there is more than one place we can petition our government, and local police departments are most acutely seeing the very dark and disturbing side of state policy. They, more than any other, know the reality of the collateral damage that only can and will be alleviated when businesses reopen and workers return to work. They have discretion in enforcement. If only they could be persuaded to commit to discretionary nonenforcement against businesses that reopen in defiance of state orders, this could be a way around the destruction our governor refuses to face.

This prompted the following appeal to my local police department. It hit their email inbox yesterday. I also posted to the Facebook accounts of the York County District Attorney and the Pennsylvania Chiefs of Police Association. On Saturday afternoon, I called in to attorney Marc Scaringi’s radio show and made my appeal. I’ve yet to hear a response from anyone, but if these agencies start hearing similar appeals in sufficient quantity, it may be our best chance to obtain relief. I understand state police may have their hands tied, but local police should have more freedom. Then if we can unleash a response from our local police, even state police may be emboldened.

Here is the letter I sent. Feel free to copy, or better write your own, but please consider doing it! Thank you!

Steven Lutz, Chief of Police
Newberry Township Police Department
York County, Pennsylvania
Dear Chief Lutz,
I urgently implore you to take a very bold and very unusual position for any police department at any time. I’m requesting that you immediately and publicly commit to discretionary nonenforcement of Governor Tom Wolf’s shutdown order against any business that chooses to reopen its operations as they see fit, within the area of your jurisdiction.
The reason for this is consideration of overall public health and safety. People need to work. People need to be secure in their property. Some are doing ok, while others are losing everything they’ve worked for. Levels of stress are rising, with some individuals reaching their breaking point. We must balance combatting what we are learning is a much overrated virus against the very real and dangerous collateral damage state policy is causing.
I’m sure you are all too aware of spiking suicide, drug/alcohol abuse/relapse including overdoses, anxiety and depression, as well as domestic violence that can involve spousal or child abuse, the effects of which can last a lifetime. Divorce is rising, also imposing damage that will linger. Mental health is rapidly deteriorating. If this goes on much longer, I fear citizens will start turning on each other. Where is the state’s concern in this very dark side of our current situation? We’re facing a self created crisis far beyond just a virus.
I’m of the opinion that our state has greatly overreacted in its response. Fears of exceeding hospital capacity have long passed to the point where empty hospitals and delayed medical procedures has become its own problem that will sometimes contribute to death. We’re learning that other than very old people or those with well known underlying conditions, most people can handle exposure with very little problem, and benefit everyone by building herd immunity that can most benefit the vulnerable as they hunker out of the way. The media hyped fear does not fade easily as we learn things are not as bad as some initial projections.
I understand defiance of authority is not to be taken lightly, but we look to our police to simultaneously protect our safety and defend our liberty. Americans are uniquely used to trusting each other to govern themselves. It is imperative we do not create problems greater than the ones we are trying to solve. It’s time for the irrational response to end. It’s time to get back to normal and end the madness. I request again you stand down in support of the freedom and sanity of the citizens you serve.
Thank you

 

 

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Why Lockdowns, Social Distancing and Other Attempts to Flatten the COVID-19 Curve is Likely a Very Big (and Costly) Irrational Fear Driven Mistake

Posted on April 13, 2020 | Leave a comment

It certainly did not take long for Americans go get whipped up into a frenzy of fear as we saw this novel virus build in China then head our way. People were dying. It was going to be bad, maybe real bad. In short order the fear sent us running into the protective arms of governments, federal and state, promoting security if only we would fall in line and obediently do whatever they told us we must. Surely we would not be misled. This was a crisis and a serious one at that.

No extreme was too extreme. No dictate was to be questioned. Just do it for your own good because those making the decisions know what is best for you. So we complied. We trusted as our elected officials closed down non life sustaining businesses that they defined as such.  We were told we must social distance, never getting closer that 6 feet from another human not a resident of our house. Then came lockdown. Then stay at home. Then school closings. Now we should, sometimes must, wear masks. Playgrounds are strangely surrounded by caution tape. The official screws kept tightening, first suggestions, then orders, then certain acts of freedom would be treated as crimes.

Even voluntary measures have gotten weird, as grocery stores have started limiting the number allowed inside at any one time and the isles have become one way with no passing allowed.

So here we are in the middle of April with our economy trashed. We’re enduring an increase in suicide, domestic violence, divorce, and drug/alcohol use/relapse for which no one is taking responsibility. Medical and dental procedures that are not emergency are being delayed without regard to possible negative consequences. Our mood can be described as dour. We’ve no timeline for restoring normalcy but we know we must sometime, when the authorities tell us we can, of course.

From the start I sensed something was terribly wrong. At first I sort of bought in to flattening the curve and mitigation from the aspect of preventing hospital systems from being overrun in our urban areas, but blanket shutdowns and extreme avoidance everywhere made no sense because the virus wasn’t going anywhere, and we couldn’t hide forever. I remember commenting in social media exchanges that exposure had benefits because it would confer immunity, or that sooner or later we would have to emerge from isolation in its presence, or that we really can’t stop the virus but only manage its inevitable progression. Responses were typically of the sort that someone might get it and then take it to a vulnerable person who might die and how would that make you feel?

Compliance has taken hold, and taken blindly that can be dangerous. People complain that others are not staying home enough. They complain if too many people at the grocery store are not wearing masks and call them irresponsible. They will be obedient in their distancing and may say something to another they think is not. They will not go out and drive around just to go out and drive around and cannot understand those who do. Some are even asking for a tighter lockdown and stricter rules. Among some it’s not PC to criticize or question authoritative policy. This is what I consider a herd mentality of submissive blind obedience to what may in fact be taking us in an entirely wrong direction.

Then there is herd immunity, too little understood, but an essential process in ending a pandemic. I understood the  basic concept but dug for details and a better understanding of how it actually works.  From what I found, once a person is exposed to an infectious agent it confers on them immunity so it cannot infect them again. Once this exceeds about 60% of individuals in the population, everyone in the population begins to benefit. As the process progresses, more and more often the virus (in this case) infects someone who has only immune people around them. The virus is trapped and ends right there. Transmission slows down without distancing, in fact as a result of the process of mixing. It’s just hard for most people to get their head around the concept that promotion of transmission can be beneficial. When herd immunity reaches 80% and above in a rather short period of time the virus will run into enough of these roadblocks that it will snuff itself out and the pandemic ends.

Fortunately, so perhaps people will believe this, I found an article at World Net Daily titled “Epidemiologist: Coronavirus Could Be ‘exterminated’ if Lockdowns Lifted“. In it PhD epidemiologist of 35 years, Knut Wittkowski, lays it all out, validating my thinking and more. From his perspective we’re doing everything wrong and I agree. He does not deny that “flattening the curve” works in the short term but only prolongs, rather than concludes a pandemic, by delaying the always necessary herd immunity.

He does state the need to sequester those most at risk first and seal off nursing homes. Fortunately, in the case of the novel coronavirus that is easy by how heavily its most serious presentation skews to easily identifiable individuals within the population. According to the CDC, as of April 13, over 90% of all US deaths have been those over 55 years old. Since about 20% of all cases will require hospitalization, if isolating that group along with other known risk factors like diabetes and high blood pressure could reduce hospitalizations to under 5%, that might protect hospital capacity as well as social distancing and lockdowns. Wouldn’t covering lost wages of those sequestered have been a tiny fraction thrown at the big wreck we created?

Subsequent to this, another article featuring Wittkowski has appeared at the American Institute for Economic Research. They claim that hundreds of epidemiologists and other medical research professionals were never consulted in the frenzied formation of pandemic policy.

In fact not only does Wittkowski not recommend social distancing, he encourages spread of the virus by not closing schools, as children must be allowed to mingle so as to help achieve herd immunity more quickly. It seems rather cruel to those sequestered to do this any other way, as they can never feel safe reentering from isolation so long as there remain many unexposed people ready to serve as vectors to quickly spread new waves of infection. Only once the virus runs through the low risk population and dies out can the high risk folks safely return, but Wittkowski claims this can happen in weeks if we let it go. On this, although he does not mention it, I assume Wittkowski would also reject business closures and masks. Exposure does, after all have benefits, and the pandemic cannot end until herd immunity has been achieved.

By closing schools especially and becoming obsessed with preventing each new infection via mitigation not only are we prolonging the pandemic, especially problematic for those at high risk, we’re setting ourselves up for waves of recurrent infections and lockdowns, some are now suggesting may cycle over the next 18 months. Does this sound better than putting this behind us quickly? The psychological exasperation alone should frighten us as much as the virus.

But what about the promise of control after mitigation by “identify, isolate, and contact trace” we’ve heard so much about? Wittkowski makes the point that contact tracing HIV is a challenge and dismisses it as foolish.

There’s only one way that mitigation via economy crushing lockdowns and social distancing would be the better choice. If there was an effective vaccine on our doorstep, ready to go within weeks, and herd immunity could be gotten that way it would make sense, but that luxury is not ours at this time. How could the current state of affairs extend that long?

We need to accept that there is no path where all deaths from this new virus can be eliminated. Had we taken the path Wittkowski suggested, our economy would not be in shambles, along with the aforementioned collateral damage. Our civil liberties would still be intact, and following the much shorter period needed to get through this there may well even be fewer deaths.

This is the relaxed path Sweden has taken and controversy has swirled around it. There are very few restrictions. Schools are open and people still gather in public. It has not always been an easy ride, and they’ve considered stricter quarantines, but just today I looked at their daily new cases on the Johns Hopkins dashboard. and all of a sudden the numbers appear to be plummeting. If this continues, they may be getting close to the end. The proof will come over time by seeing no new waves as we are likely to experience here. They never trashed their economy or gave up civil liberties. Come next fall/winter they may be the most normal and safe from Covid-19 place on the planet. Then we’ll wish we had followed their path, the one favored by academic epidemiologists like Knut Wittkowski.

 

 

 

 

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Understanding Why Employer Provided Health Insurance is at the Center of America’s Healthcare Mess

Posted on October 6, 2017 | 2 comments

 

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              And How to Get Rid of It!

 

In the course of debate concerning American healthcare policy, rarely is it suggested that the employer provision of health insurance is anything but a good thing, but is it really?

In 2016 49% of all Americans, according to Kaiser Family Foundation (based on census data) who were not receiving health benefits through government Medicare, Medicaid, military, or VA programs (another 35%), were insured through their employer. 9% had no insurance coverage. Only the remaining 7% had non-group individually owned policies. While employer sponsored insurance, or ESI, as it is commonly known, is thus heavily dominant apart from government programs, it’s popularity belies the unappreciated harm it causes, to the extent, it can be argued, it is at the center of America’s healthcare mess.

Fortunately there is a path to ending the toxicity of ESI, yet maintaining the employer connection that has evolved as a favored device to lure and retain employees, but first let’s consider why ESI is so harmful.  In doing so, it’s important to remember healthcare comprises not one but two distinct markets, one for insurance and another for medical services, both of which are corrupted by the presence of third party payers acting as agents for the buyer, and the first corruption sets up the next.

It’s also important to see employer provided insurance as an employment cost to the employer, and thereby part of an employee’s total compensation that could otherwise be paid in wages. When this is realized it can be seen that when an employer provides insurance what is really happening is the employee implicitly granting permission to the employer to spend a portion of their earnings on a financial product that may not be (and most often is not) in their best interest.

Now stop right there! Don’t people in the aggregate, allowing for those who often seem to do otherwise, always make choices in their best interest? So why aren’t they begging employers to end the provision health insurance if it’s so harmful and there’s a better alternative for them?

Often pointed as the culprit, is unequal tax treatment, where employees, on their own must use tax reduced dollars verses untaxed dollars if they have their employer provide health insurance for them. While this is a factor, in this author’s opinion there is more going on that would not restore rationality by simply equalizing the tax treatment, even as much as it would help.

Indeed employees think they are acting in their best interest when they really are acting in their perception of their best interest, which has been distorted by the separation from cost that happens with the employer provision. This has nothing to do with a rational assessment of tax implications or alternative provision of compensation by the employee but everything to do with an emotional “feeling” response to getting something as a benefit without knowledge of the true cost. Just ask and find out how many employees know how much their employer is spending on their behalf!

This has led to employees asking, even demanding, coverage of a wide array of medical services from the first dollar, never thinking they are willfully immersing themselves in paying for the incentivized overuse by others of what can normally be afforded otherwise. It’s not insurance, but a costly wasteful prepayment scheme. Yet they like it because they have been separated from what it costs, so remain ignorant of the implications. Again, ask a handful of employees the cost of medical treatment they’ve received, and if anything they may mention their copay! It’s allowed healthcare to become the only thing in our entire economy where almost every transaction involves, at least in part, the use of someone else’s money.

Often it’s pointed out that with car insurance we don’t expect things like oil changes, other routine maintenance, even larger mechanical repairs, to be included. Yet if car insurance had evolved to be employer provided chances are nearly certain we would!

Another seldom considered problem with ESI is individual suitability. Everyone’s financial situation is different, yet we’ve become accustomed to one size fits all cookie cutter approaches that few question when they think they’re getting something for nothing. More coverage is better when its cost is not a common consideration.

On the other hand, if employees were connected to the cost by buying individual insurance directly, they would quickly discover the fallacy, false comfort, and prohibitive expense associated with a cover everything approach. This would guide many to true insurance that only protects against unexpected high cost needs as they would become aware of the benefit of covering the small stuff directly out of pocket. Additionally they would free themselves to pursue job opportunities without the thought of losing or interrupting health insurance coverage.

At this point it’s not difficult to see how corruption of the market for health insurance by employer provision disconnecting the user from the cost then spills into the market for medical services. It’s not the user there either who is paying the bill, but a third party insurance company agent of the buyer who will never share the same self interest as the buyer directly. To the user, the cost is what they have to pay out of pocket, not the full charge, now inflated with considerable administrative costs added into the mix.

So how do we fix this mess? The answer is always to maximize direct payment in each of the two markets, insurance and medical services. Just as the corruption in the first leads to corruption in the second, direct payment in the first will lead to more direct payment in the second, as employees connected to the cost will quickly discover the problems inherent in the cover everything approach.

The good news is that a solution is at hand in the only bill introduced by the GOP in response to Obamacare that entirely makes sense. This is the HSA Expansion Act (HR247 & S28) introduced by Dave Brat in the House and Jeff Flake in the Senate. Unlike most legislation it does everything right.

Not only does it expand the contribution limits to HSAs, more importantly it allows HSA accounts separate of any insurance, thus allowing the purchase of insurance or medical services through an HSA as the single tax advantaged conduit. This opens the door to employers to maintain the incentive connection to employee health needs, while breaking the toxic provision of health insurance by shifting to a defined contribution model, where employers by direct or matching contributions to an employee’s HSA can become as common as to a 401k for their retirement needs. So long as states would follow by relaxing cumbersome regulations and mandates, employees could then decide what is right for their unique medical needs at costs truly subject to the discipline of the marketplace.

To this could be added an unique voluntary universal access approach that could replace both Medicare and Medicaid, maximizing direct payment, both actual and simulated, by a system of incentives, as previously discussed here and here, that, by trusting market forces over bureaucratic control, would have the power to strip out wasteful costs like nothing else I’m aware, as it supplants the growing Leftist desire for universal access by single government payer.

As many large employers with entrenched HR departments, are curiously wed to the provision of employee health insurance, one addition to the HSA Expansion Act that may get them to move toward defined contribution may be a provision to give employees the right to opt out of employer insurance with full transfer of the cost to their salary and/or HSA, as opposed to now, where declining employer offered insurance, say, to be instead on the policy of an employed spouse, results in little or no benefit to the declining employee.

Solutions are indeed at hand. We need only to identify and encourage elected officials to act on them, and the sooner the better!

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Imagine THIS Obamacare Replacement & Understand WHY It Makes So Much Sense [GOP!]

Posted on January 9, 2017 | 4 comments

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The Bipartisan Solution ALL Could Accept?

It’s been almost 10 months since I published “The Case FOR Conservative Market-Based Universal Healthcare Reform“.  I’ve wondered if “The Voluntary Universal Access Public Option” wouldn’t have been a more effective title.  Either way, the words are intentional for a purpose, which should become obvious without further explanation.  For those unfamiliar, reading the original post may prove useful but not essential.

The March, 2016 post has achieved over 800 views.  Response has been mostly positive but mixed, with some of the harshest criticism coming from hyper sensitive market allies who trip up on the word “universal”.  I remember one response simply said, “This just makes so much sense!”  Of course, though biased, I agree!

I know it’s been viewed by several very influential thinkers as evidenced by re-tweets or likes of tweets with the link, including Sally Pipes of Pacific Research Institute; Dr Scott Gottlieb, American Enterprise Institute; John Goodman, Goodman Institute & father of the Health Savings Account; and Michael Cannon, Cato Institute & inspiration for Rep Dave Brat’s and Sen Jeff Flake’s Health Savings Account Expansion Act HR5324 and S2980 respectively (114th congress), the only proposal from the GOP so far that completely makes sense.  None have criticized (or publicly praised) the Market Universal concept, but Michael Cannon did surprisingly say in my  presence “What’s not to like?”.  I’ll attempt to confirm his observation by explaining the many advantages of this unique concept.

Market Universal (or The Universal Access Public Option), is an expansion of a suggestion to fix Medicare in David Hogberg’s 2015 book, Medicare’s Victims.  In that regard it should be called the Hogberg solution.  By simply putting people in charge of the money, with incentives to be frugal in its use, it more than any other proposal from the GOP,  most effectively addresses the simple three word solution central to any meaningful healthcare reform – Maximize Direct Payment.

It combines actual direct payment with money a voluntary participant must set aside from income into a personal HSA, with simulated direct payment beyond that from a shared 3 tiered participant funded pool, used only when the personal HSA is exhausted. Incentives to use pooled funds wisely are in the form of percentage rebates of unspent portions annually.  Because participation is voluntary, the mandate to contribute to an HSA is not, as some have suggested, coercive, anymore than the requirement to make payments when voluntarily entering into an insurance or mortgage contract.

Since annual pooled fund availability totals $75,000 it is the minimum even the poorest participant has available each year.  Note that the risk to the pool is limited, but the need to ration is eliminated by creation of very low cost private personal stop loss insurance to cover any really big events.  While $75,000 can be consumed very quickly currently, it will go much farther with the change to direct payment by individuals making choices in their self interest.

The advantage of mostly direct payment leads to huge cost elimination on many fronts….

Imagine the difference when doctors no longer have to incur the considerable cost of getting paid for their services, that some estimates claim reaches 30% or more.   This figure becomes quite believable listening to subscription-based direct primary care pioneer Dr Josh Umbehr of AtlasMD in Wichita KS state (at ~6:30) overhead at their practice, completely third party payer free, runs less than 30%, while overhead at insurance involved primary care practices hovers around 60%.

Imagine when ever more complex coding is a thing of the past and practices no longer have more employees dealing with third party payers than clinicians treating patients.

Imagine  when doctors or surrogates no longer waste time with pre-authorizations and fighting off rejections, before finally getting permission to treat and then paid, which often itself involves long waits and then arrives in bundles that make it difficult to identify individual case reimbursement errors as opposed to being paid directly at the time of service by the patient at a mutually agreed price.

Imagine how a new paradigm of near ubiquitous direct payment will direct everyone to honest transparent pricing and competition for patients based on price and quality, without being forced by law, like all medical services not traditionally covered by third party payment, such as Lasik, cosmetic surgery, or dental implants, where quality has gone up as prices (often seen on billboards or newspaper ads), have come down.  It would not be unreasonable to see the combination of eliminating the cost of getting paid and effects of innovation driven by true competition drive prices down by at least half.

Imagine when third party payer network arrangements with doctors (effectively cartels) become a thing of the past, especially for those with Medicaid, where in some locations accepting doctors can be very hard to find.  This means doctors will price their services based on what it costs to provide them, and the same price will be paid by anyone who walks through the door. Each will enjoy the same dignity of access as anyone else.  With each doctor currently having a separate network arrangement with each different plan from each insurance carrier, as well as dictated reimbursements for Medicare and Medicaid, and differing cumbersome regulations and requirements imposed by all, it’s no wonder doctors have so little time to spend with patients.  It doesn’t have to be this way, but continuing down a road of embracing what has become traditional third party payment will only continue our enslavement to it and its considerable costs to treat no one, both for doctors and the rest of us as patients.

Imagine when the lowest earners among us can participate in the same Market Universal Access Public Option as anyone, instead of another demeaning program (Medicaid) with its benefit cliff adding another cage of dependency.  After all, in America most earners do not have to stay low earners and should never be encouraged to do so.

Imagine a voluntary program based on expanded health savings accounts that allow for passing to a beneficiary upon death.  Within or without participation in Market Universal, this can present the potential to build family healthcare trusts that also further protect pooled funds by those who continue to opt for Market Universal.

Imagine we can reverse another troubling trend.  Fewer and fewer doctors are willing or able to put up with the increasing burden of third party payers and their and government payer regulations, paperwork, and cost to get paid.  I’ve heard doctors say 1/3 of their time seeing a Medicare patient involves government paperwork.  To escape, they are becoming employees of growing hospital systems, where they feel some relief but are still trapped in a system that demands they see more patients in less time and only make referrals within the family of connected practices, further challenging those who wish to remain independent.  Again it doesn’t have to be this way.

That these highly trained professionals we depend on so much can serve our medical needs better at lower cost in a system of freedom and markets is not just fanciful theory.  It’s being proven by market pioneers who have been rejecting the third party payer juggernaut for the clarity and peace of honest cash priced practice.

In primary care this rejection of the third party payer is being done both by fee for service and subscription based direct primary care arrangements.  Without the considerable overhead of engaging the external payers they can offer services at greatly reduced rates and spend much more time with patients, so important at the primary care level especially.  Many use their extra time to run in house pharmacies, labs, or imaging at a fraction of the usual cost, or arrange low cost services with outside vendors.  Many make house calls and offer direct access by email, cellphone, Skype, etc.  Appointments are scheduled in excess of half an hour for the same or next day.  They also can perform the wide range of procedures they are trained to do but which are often offloaded to specialists when they must see 30 patients in a day for 10 minutes each to make ends meet.  To easily find a direct primary care practice go here.  For one example of the growing number that offer remarkably affordable pricing go here.  Most importantly these doctors, without exception are happy.  I don’t want a mechanic working on my car who hates his job!

Yet how many, in our current system, on their own, can afford specialist care and complex surgeries for cash?  As it turns out over 60% of employers that provide health benefits self fund.  They are simply bill payers and, even as the plans are set up to look just like insurance to the employee, they are really not.  Led by pioneers like Dr G Keith Smith at Surgery Center of Oklahoma, whose practice has posted low honest bundled cash prices on the internet since 2009 and lowered prices five times, they have been able to reject third party payers entirely by contracting directly with self funded employers (while also accepting individual cash payers), under arrangements where the employee saves as well by having their copay and deductible waived when they choose to use their high value option.  In fact, in this report from Dr Smith, he explains how SSO saved their self funded county (and hence taxpayers) over $1 million in the first 9 months and a new contract with the state may save state taxpayers $95 million.  Even though it’s not quite like the doctor and patient dealing directly, the benefits of this form of direct payment are enormous and it’s become a growing movement, with cash priced facilities even competing against each other at sites like pricinghealthcare.com.  With Market Universal as an option, more individuals will be in the position of self funded employers to choose where to spend based on price and quality.  It’s time politicians take notice of these positive developments and understand good policy that lowers costs resides in trusting markets and free choice rather than bureaucratic control.

It’s important to understand Market Universal (or the Universal Access Public Option) is proposed as a voluntary program that precludes nothing else.  It starts by putting the Expanded Health Savings Account concept of the Brat or Flake bills, themselves inspired by Cato’s Michael Cannon’s Large HSA concept, at its core.  Thus replace should start with expanded HSAs, which alone can inspire many positive changes as employers likely will voluntarily and gladly move from defined benefit to defined contribution health benefits, thereby keeping (but not requiring) the employer connection to health insurance while removing its toxic provision. Employer matches of employee contributions to a personal HSA will then likely become as common as to 401k plans.  Whether employees choose to use their HSA to fund medical services only, purchase medical insurance products they own independent of employment, or become a participant in the Market Universal Healthcare program is entirely up to them.

Market Universal is intended as a lifetime commitment, and following an open period upon initial availability, participants would have to sign on after age 18 and before age 25.  The mandate to contribute to an HSA, up to set balance limits, is within an entirely voluntary program, thereby a freely accepted obligation.  Participants only would be flat taxed sufficient to fully fund the shared pool, which could be kept separate from government hands and administered by private contracted book keepers much like the Federal Thrift Savings retirement plan.  Participants would have the opportunity to exit at any time but reentry would not be allowed.

Keep in mind Market Universal is an option that at once replaces Medicare and Medicaid so the current Medicare tax ends, and states no longer have to tax to fund  their portion of Medicaid.  Since networks become irrelevant, low earning participants have the same access to care as anyone, but the same obligation to direct a portion of earnings, including any government transfer payments or unemployment compensation, to a personal HSA.  While low earners pay less into their personal HSA, they will be more likely to use pooled funds, as higher income participants contributing more to HSAs will be less likely to take from pooled funds. Likewise those with higher incomes will contribute much more to pooled funds but, since also contributing more to their HSA, will less often use pooled funds and more often be rebated incentive payments for what they do not spend.  Beyond the pool’s annual limit, all will have the option to buy ultra high deductible (pooled funds + HSA balance + other personal savings available) personal stop loss protection, which due to its infrequency of use, should be very inexpensive, even at the minimum $75,000 deductible level and be much less vulnerable to the negative effects of community rating, which itself would be tempered by many older individuals having accumulated more in their HSAs, sufficient to safely allow its inclusion.  Guaranteed issue though would still require restriction past initial entry into the program, possibly by surtax to the pool or some other mechanism for those who wait.

No one would be forced into the Market Universal program.  Traditional insurance could coexist.  Those who now enjoy the Obamacare exempt faith based medical sharing arrangements could continue as is, and new ones, faith based or otherwise could be formed.  In many aspects, Market Universal is an institutionalized version of such arrangements.  As stated earlier, Market Universal precludes nothing else, as it provides an attractive option, especially with the ending of Medicare and Medicaid programs.

While socialist aspects are admittedly present, as they are by degree in the health systems of every other nation (and indeed are central to insurance itself), they will be under a layer of market discipline and individual responsibility first and foremost.  Market Universal can be an uniquely American concept that dares to trust market forces and personal choice to set prices, lower costs, and best direct scarce resources in an area where fellow humans’ lives and health are at stake.  It’s not the same as losing a car or house to lack of insurance or inability to pay, and it’s time conservatives recognize this.  A great overview of how countries around the world approach healthcare can be found in Chapter 3 “In Search of the Best Health Care System in the World” of James Bartholomew’s intriguing new book “The Welfare of Nations“.

To conclude, perhaps the biggest advantage of Market Universal (or the Universal Access Public Option) is that such an Obamacare replacement proposal would almost certainly garner some support from the Left, allowing passage in bipartisan fashion, as it supplants and roadblocks their otherwise never ending desire for single payer universal healthcare in a way no other suggested replacement plan can do.

The Right has said they seek a market solution, while the Left screams for universal coverage or at least a public option.  Under unique Market Universal alone, it is possible to do both!

 

 

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The Case FOR Conservative Market-Based Universal Healthcare Reform

Posted on March 13, 2016 | 4 comments

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Not Only Possible but Preferable to Anything Put Forward to Date

 

Say what?  Again?  Universal coverage?  Is Bernie Sanders on to something?  Well, in a way yes, as far as good intentions go.  What will be explored here, is the possibility and preferability of achieving the good intention, not by methods of command and control central planning, but government policy that embraces market forces and trusts individuals, making free choices in their self interest, enticed, even when using the money of others, to act as if it is their own, thus avoiding the proverbial road to hell.

The Inspiration

The policy concept presented here, though original, does not deserve to be called The FreeMktMonkey Solution.  It is the expansion and adaptation of  a seed idea presented in the final chapter of David Hogberg’s 2015 book, Medicare’s Victims: How the US Government’s Largest Health Care Program Harms Patients and Impairs Physicians.  In deference to Hogberg’s brilliantly simple but arguably far too timid, solution to Medicare’s flaws, the idea of conservative universal as a replacement to Obamacare, will be presented as the Hogberg Solution, from which it arises.

Starting Points

  1. Just because it’s a policy of the central government does not preclude the possibility of protective legislation that insures and embraces natural forces of voluntary free exchange in the marketplace to achieve desired solutions superior to central control.
  2. The market best achieves optimal setting of prices, and allocation of scarce resources through the direct interaction of the seller and the buyer,  not via the seller and a third party agent of the buyer, who will never share the same level of self interest as the buyer directly.
  3. A person’s life and immediate need for necessary treatment to maintain and extend it is not the same as losing a car to a crash or a home to a fire, or investment to bad advice of a broker.  It’s a tough position for anyone of compassion, including conservatives to stand for denial of treatment in someone’s moment of need, when life is at stake, due to inability to pay.  Accepting this, is to make a strong argument for an individual mandate, that “shared responsibility payment” thing in Obamacare, as an acknowledgement of the implied responsibility of each individual to accept their part, to the limit of their ability,  to protect their neighbor from the potential to have to pick up after their inability to pay.
  4. Medical science has made very rapid advances over the last century.  There are many more treatments, medications and devices available that have drastically improved both quality of life and longevity.  This alone will involve more spending simply because of availability.  It’s sometimes hard to believe that routine use of antibiotics, did not commence until the early 1930s, still about 15 years from being one century ago.
  5. While condition of health is clearly within control for most, it is certainly not for all.  Thus the ability, by healthful living, to protect others from an obligation to have to cover one’s own inability to pay for treatment, is limited.  Sudden unexpected disease, injury, or congenital defects can affect anyone.
  6. As outlined in what remains a gold standard June 1994 study, by Stan Liebowitz, writing for Cato Institute, Policy Analysis No. 211, Why Healthcare Costs Too Much, central to the mess we have in costs of US healthcare, is overreliance on third party payment.  The illusion of free or almost free, in coverage of what can normally be afforded otherwise, adds significant cost by promoting overuse (that must be baked into premium) along with expense to interact, often combatively, with third party payers, to obtain payments that should be made efficiently, directly, at the discretion and choice of the buyer, in direct dealings that preserve the purity of the doctor-patient relationship.  The Cato study suggests the solution is utilization of the highest level of direct payment possible, by health savings accounts and catastrophic insurance.
  7. Only a small percent of healthcare spending is for emergency situations, where there is no time or opportunity to check prices or treatment options, and make informed choices on how to direct resources.  Even this Brown University study that claims previous reports of emergency spending have been far too low, at most estimates emergency spending does not exceed 10% of our total $2.6 trillion.  This argument is often made by those favoring a government single payer system as evidence of why a market in medical treatment cannot exist.
  8. In both the Medicare and non government civilian healthcare markets, use is heavily concentrated into a very small percent of the respective populations, with little of that being priced by normal market forces through the direct interaction between the buyer and seller of services.  This argues for insurance or some backstop protection for the big items, even as the vast majority in most years would have no trouble paying their entire bill without it, and over the long haul, most would be better off by banking premium otherwise spent.
  9. Only small minorities of buyers need to be active in finding the best deal possible to elicit response from sellers that benefits all market participants.  Hogberg notes this as the concept of “marginal consumers” that drive the market, producing price and quality benefits for the non-marginal majority.  This truth is central to the viability of Hogberg’s solution for Medicare (and its extension to universal).
  10. It may not be necessary for buyers to spend their own money to achieve the benefits of the marketplace,  if means can be employed to entice them to spend the money of others as if it was their own, through a system of rewards, that more effectively produces desired results than schemes of central planner bureaucrats.

The Solution

Hogberg comes to the conclusion in Chapter 8, after noting typical failed attempts to get a handle on Medicare spending involve politicians, bureaucrats, and all manner of experts, engaged in elitist planning, at the exclusion of spontaneous order that arises through market forces of individuals freely making choices in their best interest.  He states, “It never seems to occur to them that the best way to align incentives is to let the patient control the money that pays for the care.”  But how to do that in a way that does not promote waste and abuse when it may not be their money?

This is where Hogberg encounters sheer brilliance, that if not so timid with the idea, could have led him to propose an extension of his Medicare Solution pre-Medicare to the entire healthcare sector of our economy, opening the potential to achieve the universal coverage goal of the left in a way that does not make healthcare a right without obligation.

Hogberg’s solution is simple.  Pay the patient, through incentive rewards, to do a better job than various schemes, by CMS, to fix prices, assess quality and value by questionable metrics, determine reimbursement, even direct treatment, all by artificial means far worse than a free market would accomplish on its own.

To do this Hogberg suggests, since we spend all this public money anyway, provide each Medicare beneficiary with 2 annual accounts: a basic account of $5000, and a major medical account of $70,000.  For anything not spent out of the basic account the beneficiary would be paid 10% at the end of the year to use for any purpose whatever.  For anything not spent out of the major medical account 1% would be paid to the beneficiary.

Here is where Hogberg makes a flaw, as he suggests the 1% from the major medical account would only be paid if that account was reached following total depletion of the basic account.  He recognizes the moral hazard of this in producing an incentive to spend out the basic account ($500 max rebate) to get to the $700 max rebate of the major medical account’s 1% rebate.  The obvious way to correct this would be inclusion of both rebates, so the individual who spent nothing in a given year would get $1200, with perhaps only the $500 going to any purpose and the $700 dedicated to an HSA for future medical expenses, also protecting future rebates.

He points out that in 2012 25.7 million of 37.7 million (68%)  Medicare recipients spent <$5,000, and only 3.9million (10%) spent over $25,000, with their average about $57,000; so a $75,000 total account would be more than adequate for most beneficiaries in any given year.  Expenses beyond that could be covered with a private personal $75,000 (or greater) stop loss policy.  This, due to its low cost due to low use, would likely attract widespread voluntary choice, thereby allowing limited government exposure without the need for rationing either by availability or delay.

Hogberg also missed, or was too timid, to entertain a logical extension of his concept pre-Medicare as a solution to the entire national system, unique in all the world, and compatible with extra governmental market solutions being developed and growing rapidly by efforts of pioneers such as Surgery Center of Oklahoma in transparent honest competitively priced surgery or Atlas MD in Wichita KS, leading development of models of Direct Primary Care, both now entering into direct cash relationships with self paying individuals and the approximate 60% of employers who self fund health benefits they provide their employees, bringing competition, quality and value as seen nowhere else.

Indeed, Hogberg’s suggestion of a demonstration project for Medicare, belies his otherwise strong faith in the power of market forces, such that it is Medicare itself that may better serve as the demonstration project to extend his seed idea to the entire healthcare sector of our economy.

Such an extension would also be compatible with the single best reform proposal of any to date that respects freedom, that of Cato’s Michael Cannon, with his 2008 Large Health Savings Accounts concept, or as published here in July 2014,  after noting the failure of Republicans or conservatives, now in almost 8 years following the election of Obama, to develop a plan of their own that doesn’t dictate purchase of a qualifying product to obtain benefits from the government or retain a large proportion of third party payment, the post “GOP Stuck in ACA Replacement ‘Plan Trap’ as Magic Bullet Solution Hides in Plain Sight“, written prior to any knowledge of Cannon’s proposal, but very similar in approach and expected outcomes.

The Hogberg Solution as applied to the whole US system, as presented here, would require modification to Dr Hogberg’s seed concept, but allow market based universal to become a reality that would significantly, instantly create a system of near ubiquitous direct payment.  This is the game changer, as no other proposal to date has suggested such a virtuous possibility exists, and assuming sufficient popularity, could allow for voluntary participation.

Here’s how it would work.  Every participant would be required to pay a percent of all income into a personal health savings account to a limit.  To start, then periodically adjusted for inflation,  this may be 7.5 of all income to a $50,000 balance, then 5% of all income to a balance of $100,000, which would from that point only have to be maintained.  Employers, as enticements, could agree to match employee inputs.  A national tax would be required to cover additional expenditures, but factoring in market induced competitive savings plus elimination of 3rd party payment processing expense, may be little more than total taxes required to fund Medicare and Medicaid currently, and would replace those taxes.

Hogberg’s suggested Medicare accounts would be modified for the universal system.  For working people they would be accessed, only after exhaustion of personal health savings accounts.  One modification would be the creation of three layers of account.  The basic $5,000 with 10% of any unused portion rebated for any use would remain.  Then an intermediate account of $25,000, followed by a $45,000 major account would apply.  Unused portions of these accounts would be rebated at 2% ($500), and 1% ($450) respectively, but not for any use.  These rebates would apply to the personal health savings account, both providing future protection to the public accounts and allowing reaching one’s mandatory individual funding limits sooner as well as protection of future rebates.  Of interest, $950 is sufficient to fund unlimited direct primary care at many of the growing list of doctors offering this choice.

For anyone still working who exhausts their mandated HSA and taps the government pool, continuing work related payments to their HSA would always precede any government pooled funds in paying for services as used and bills come due.

As percentages of any other government cash assistance transfers (welfare) would be directed into individual health savings accounts as well, both Medicare and Medicaid would be rolled into the new universal system.  Opt outs could be allowed but then initial entry or reentry would be have to be prohibited lifetime.  The idea in the mandate is a requirement to buy nothing, just forced budgeting to protect others in a system where we can agree no one will be left “dying in the streets”, as Donald Trump has stated.  It raises the question also if a tax is not a tax, when that set aside is available for that person’s and their immediate family’s exclusive use.

The game changing nature of this extended Hogberg Solution should be obvious.  Price transparency would happen organically overnight as well as huge savings just from elimination of the cumbersome third party payment mechanism in place now.  Providers of treatment and devices would be instantly responsive to concerns of price and quality.  Even well past normal working years for many, into what are Medicare years now, carried HSA balances would continue to protect the government pooled funds, themselves limited without the need for rationing, by personal stop loss private insurance.  Any remaining HSA balances at death could be transferred to a beneficiary.

Private insurance protection expense beyond the government pool could be further lessened in cost by allowing stop loss policies in excess of $75,000 by including other personal sources, such as one’s HSA balance or other assets willing to be spent first.  Thus a person with $100,000 in their HSA and $25,000 in other assets available for medical expenses, along with the $75,000 government funds, would only need a personal stop loss policy to cover expense exceeding $200,000, very unlikely and very inexpensive.

By trusting individuals with control of the money, acting freely in their self interest, and having faith in the predictability of their response to properly presented economic incentives and constraints, along with a system of rewards, we can create a government devised system that respects the marketplace, innovation, and choice, while keeping government command and control decision making out of the equation.

For more please see followup Jan 09, 2017 article here.

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Opportunity for GOP in Scalia’s Death – If Statesmanship Can “Trump” Egos

Posted on February 15, 2016 | 3 comments

CrossroadsScaliaDeathGOPMess

AS ONE DOOR CLOSES,  ANOTHER ONE OPENS……..

 

UPDATE 2/21 — Friday, Feb 19, the US Circuit Court of Cook County in Chicago agreed to hear a challenge to Ted Cruz’s eligibility to become President.  Since no one knows for sure how the court will rule, and how messy it could get, the  argument set forth in this op-ed is only strengthened as “natural born” is not a qualification to serve on the Supreme Court.

 

Make no mistake, the events of Saturday February 13, 2016 will be remembered when future histories of the United States of America are written.  News of the unexpected death of Supreme Court Justice Antonin Scalia, has rattled the nerves of conservatives who see a narrowly divided court shifting to the death of Conservatism for a long time.  Monica Crowley, typical of the immediate response, tweeted on learning the news, “The worst possible news.  Oh my Lord.”

As the dust settled, an epic political struggle, ahead of a pivotal Presidential election, has been defining itself, with the GOP vowing to block any nomination Obama may put up until after the election and a new president takes office.  That the debate will get heated is certain, as Obama quickly announced he will nominate a replacement soon and Democrats claim the Senate has no right to delay, even as the GOP exposes precedent, where Democrats have taken a similar stance.  Truth being, it’s politics.

GOP delay is not without risks either, as the cost could mean loss of the Senate; and as evidenced by the South Carolina debate the evening of Scalia’s death, the GOP has their own problems with increased infighting that could lead to Donald Trump walking away with the nomination, then losing the general election to either Hillary Clinton or Bernie Sanders.  In fact, the GOP was facing a whole lot of potential trouble absent Scalia’s passing.

A February 2-3 poll of 1,236 registered voters nationwide, conducted by Public Policy Polling (PPP) paints the current troubling picture for the GOP.  In head to head matchups with either Clinton or Sanders, only Marco Rubio beats either.  Considering only Trump, Rubio and Cruz as the Republican likely nominees, Trump loses the worst against either likely Democratic opponent.  Plus Trump’s favorable-unfavorable rating, at 63% unfavorable, seriously lags any of the other Republican hopefuls, by this latest poll.

But for the optimist, who believes when one door closes another often opens, or the faithful who may see divine intervention, Scalia’s death, oddly may have presented an opportunity for the Republican party to escape their mess, by a deal that could trump even Donald Trump himself.  American history is known for grand compromises in times of crisis, and this one would fit among those of our past, if the individuals can rise to a rare level of statesmanship ahead of their own selfish egos.

Here’s how that could happen, from one who started out favoring Carly Fiorina, then moved to support of Ted Cruz, and never trusted Donald Trump.

National polls from whatever source show Trump between 30-40% approval.  This, of course means 60-70% of likely GOP voters favor another candidate or are still undecided, with most of that support either for Cruz or Rubio.  Unconventional times call for unconventional methods to deal with the situation, and this solution would certainly be unconventional, as it constructs a unified path to victory in November, quells the toxic circus atmosphere of the last debate, and takes care of the Supreme Court question simultaneously.

With apologies to Ted Cruz supporters, he needs to step aside, throwing all his support to Marco Rubio.  Rubio, in return, as his part in this Statesmanship Deal, must commit to nominating Ted Cruz to the Supreme Court, either to fill the current vacancy if not filled, or the immediate next one that arises.  Every effort should be made to get the remaining candidates, Bush, Kasich and Carson to support the deal.  Both Rubio and Cruz would come away winners, and Donald Trump’s future would become very clouded.

The deal should not be behind a cloak of secrecy, but be made public and defended.  As participants, though, both Rubio and Cruz, as Senators, would have to stay out of the effort to delay Obama’s nomination, leaving that job to Mike Lee, Rand Paul, or Mitch McConnell if he can maintain his spine.

To extend this unconventional approach one step further, in an effort to seal the deal for November, Rubio should then immediately name Carly Fiorina as his running mate if nominated, and she should join him on the campaign trail as soon as possible.  This demonstration of ability to come together with a unified approach to victory would be a big problem for the Democratic Party.

Finally, on the gang of eight issue, Rubio hopefully is being genuine in seeing the error of his ways and accepting the political realities of the issue, as he has expressed.  He still has some other conservative flaws, like support of sugar subsidies, but then conservative plusses also, namely his significant effort to undermine and cripple Obamacare, by restricting bailouts of insurers in the budget deal that Obama signed.

Meanwhile Ted Cruz, a Catholic also (correction I’ve been informed he’s Baptist), at under 50 years old, could be the ideal replacement for Antonin Scalia, upholding our Constitution faithfully for another 30+ years.  One door closes.  Another door opens, and the Republic is spared a progressive avalanche.

 

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