"Quality Bonuses"--Grease for the Squeaky Wheels

One hand giveth while the other taketh away–and both hands live in the White House.

— Millions of seniors in popular private insurance plans offered through Medicare will get a reprieve from some of the most controversial cuts in President Obama's healthcare law.--LA Times 4-20-11

More on this posted at The Black Ribbon Project.

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Why Science and Politics Should Not Mix, Part 2

"We have long known that some places...offer high-quality care at costs below average."
--Barak Obama, 09-09-2010, Joint Session of Congress

“[O]ne of the biggest signals of inefficiency in American health care is the massive regional variation in cost and health outcomes…yet the higher cost areas and hospitals don’t generate better outcomes than the lower-cost ones. The result is an estimated $700 billion a year spent on health care that does nothing to improve patient health.”
-- Peter Orszag, OMB blog post, 05-28-2009

It ain't so much the things we don't know that get us into trouble. It's the things we know that just ain't so.
--Josh Billings, and several others

Just over a year ago, I wrote a post on why we need the separation of state and science. The case in point was the use of the research from the Dartmouth Atlas study on regional variation in Medicare costs to claim a 30% reduction in Medicare spending could be achieved if only medical care was centrally controlled to produce more uniform practices. Those conclusions have recently been over-turned.

Dartmouth researchers have associated the unexplained portion of geographic variation with the supply of specialist physicians or hospitals, potentially leading to incorrect inferences about the causes of geographic variation—so-called supplier-induced demand. However, recent studies indicate that health sta­tus is a more important factor driving variation in spending than previously believed and that demographic and economic factors, as well as the structure of local health care markets, shape patient preferences and provider practice styles in far more complex ways than early analyses suggested. High spending might reflect inadequately measured health status or some other factor, such as poverty.

This is a point that Buz Cooper has been making all along. These arguments may seem a tad wonky--and I suppose they are--but the crucial issue is that the original findings of the Dartmouth Atlas study were very prominent in justifying the new health care control law--and now it's announced those results were unreliable at best, and more likely just plain wrong.

Read Cooper's whole post for more detail.

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So what exactly CAN I call the new health care control law?

Supporters of the law object to the term "ObamaCare." Somehow it is insulting to refer to the law by the name of the President who worked so intensely to have it passed.

Am I really expected to call it the "Affordable Care Act" or the "Patient Protection and Affordable Care Act" when I think it is neither affordable nor protective of patients? I find that insulting to my intelligence!

If supporters want us to refer to a law by its formal title, how about naming it something that's more descriptive and less propaganda.

"Explosive Regulatory Control of Health Care" ERCHC

or

"Massive Arbitrary Power to the Department of Health and Human Services Law" MAPDHHS

or

"Health Insurance as Public Utilities Law." (That one at least comes out with a pronounceable acronym: HIPUL.

Or if you prefer something neutral: The 2010 Health Care Reform Law.

Until politicians stop insulting us by titling their laws with such ludicrous names, they best be prepared to be insulted right back.

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Frictionless Competion

Austin Frakt over at The Incidental economist states:

Traditional Medicare, being immune from market forces (though not political forces) can counter that provider market power, essentially setting “below market” prices by fiat. (Don’t go thinking this is an affront to a perfectly competitive market. High provider market power is itself a deviation from a perfect market.)

I don't understand the fascination some economists have for the "perfectly competitive market."

In physics, I can see the advantage to improving our understanding of force and inertia by experimenting and theorizing in a frictionless system. But when it comes time to build machines in the real world, we'd be in big trouble not to account for friction.

Seems to me like the same thing goes for economics. Simplification has its advantages to understanding the economic principles and how they function, but when you get into the messy world of voluntary exchange between free individuals, with its innovators, early adapters, laggards and the rest, perfect competition does not and can exist. We can identify and account for the differences between the idealized system and reality, but any attempt to "correct" for the "failure" is try and substitute what someone thinks the world should be for what the world actually is ---and that is courting disaster.

Am I missing something here?

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Where do your federal tax dollars go?

April 15.

Tax Day, and my in-laws wedding anniversary. (This year it's their 60th!!)

Today I received an email from David Plouffe, Senior Advisor to the President. (Bet you didn't know I had such powerful friends.)

Here it is:

Good afternoon,

Have you ever wondered how much of your own tax dollars actually go to support foreign aid? To support education? Well, now you can find out – and you might be surprised.

In his State of the Union Address, President Obama promised that this year, for the first time, American taxpayers would be able to go online and see exactly how their federal tax dollars are spent.

So today, we’re announcing the first-ever federal taxpayer receipt. Check it out:


Just enter a few pieces of information about your taxes, and the taxpayer receipt will give you a breakdown of how your tax dollars are spent on priorities like education, veteran’s benefits, or health care.

Sincerely,

David Plouffe
Senior Advisor to the President

I decided to give it a try. Plugged in my Social Security tax, Medicare tax and Federal Income tax. Then I calculated how much of my tax is spent on the military, the courts and the police---the only three legitimate areas of government action.

31%

If government was reduced to its proper function of protecting our inalienable individual rights to life, liberty and property, I could pay 60% less tax. More importantly, I would have 60% less my property expropriated by the very institution designed to protect my property.

Something to think about.

Government needn't be so large and our liberty so diminished.

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