Once again our nation has been shocked by someone wielding a gun to slaughter innocent people. It’s hard to say if this is a new trend or something that sells newspapers and 24 hour news airtime so well that we hear about it more than we used to. The one thing I am certain of is that it is a horrible crime whenever and wherever it is committed. It’s hard for me to imagine how someone could be so twisted as to kill people just to make a point or for personal enjoyment but obviously there are those who do. As usual in such situations our gun laws immediately come up for review and discussion. The fact that we are a rarity for an industrialized civil society in that guns are so widely owned never escapes anyone’s attention when incidents like this occur.
I was raised by a gun owner and NRA lifetime member. My dad was a hunter and a competition target shooter. I was shooting a rifle before I was seven and a handgun not long after. Many happy hours of target shooting and hunting with my dad followed. He reloaded for himself and for other target shooters, down to the details of having different loads for different guns of the same caliber. Guns were serious business to my dad. He supplemented the money necessary for these activities with his reloading and teaching gun safety as a certified instructor for civilians as well as police officers. For a time, he had a gun shop on the side as well, so I was raised in an environment where guns were quite commonplace and part of your daily lives. The one overarching message from observing my dad giving shooting lessons and safety courses is that handguns were designed for one purpose and one purpose only, they kill people. They are not to be pointed at someone to control their actions or to protect yourself. If you point a gun at someone it is to kill them. Any other proposed use for handguns is simply avoiding the point that they are made to kill other people.
We have become desensitized to this reality by the way that handguns are regularly utilized. Police use them as a means of controlling the actions of suspects. Movies and TV shows are full of people using handguns for this and other reasons but the reality is that they really only have one function and any attempted usage for something else often leads to that purpose whether we mean to or not. People whose express purpose is to kill other people realize this. Unfortunately, most other people do not. They are concealable, they are relatively lightweight and they are extremely deadly when used by someone with reasonable skill.
Every time some sort of mass killing spree occurs there is an instant backlash against the proliferation of gun ownership in this country. This is usually followed by an opposite and equal reaction in which a lot of gun owners point out that if someone else would have had a gun, maybe there wouldn’t have been so many innocent people killed. There is an element of truth in both arguments. However, the likelihood that an untrained gun owner will be able to stop someone intent on mass murder while under fire is a long shot to say the least. I am sure it has happened and will happen again in the future but the odds of having such a person in the same place as some random nut job killer intent on taking a lot of innocent people out are rather long. Add to that the better than average chance that such a gunfight will result in even more innocent people being shot and the whole concept of safety by more gun wielding falls apart.
There is however, one other factor that needs to be taken into account when we weigh the good that comes from gun ownership vs. the bad. There are probably a lot of reasons for this but the fact remains that gun accidents account for a lot of accidental deaths in this country. I am struck by this often when reading the news. It is not as dramatic as someone walking into a church in order to kill a lot of people he doesn’t know but it happens a lot more often so it has to be accounted for if we are to truly do an analysis of the relative merits of massive gun ownership. The truth is no one likes to hear about this. No one gets any sort of pleasure from a news story of a dad accidentally shooting his four year old son while getting his gun out of the car. It won’t be on the 24 hour news cycle because there isn’t a lot of good ratings in horrifying people with the death of innocents accidentally killed by their loved ones. I can’t imagine the heartbreak and constant pain that would follow such an incident but it happens and it happens a lot more often than the mass shootings we seem to be so fascinated with.
If you add up all the mass shootings since 2010, in 19 separate cases some 154 people have died in these sensational incidents while 97 have been shot and survived. During this same time period we have averaged over 600 children per year being killed in gun accidents. In case you haven’t already done the math it come out to over 3200 children who have died from accidental gunshot wounds in the US since 2010. Any way you slice this information the fact remains that it is a direct result of our fascination with owning guns in this country. It simply doesn’t occur in other civilized nations because they don’t have the same kind of fascination. Breaking this down a little further, we average somewhere in the neighborhood of 10,000 accidental shootings of children in the US annually. In 2010 alone had 15,576 accidental shootings of children in the US.
Another argument that usually comes up is that such killers will find another way to kill people if they don’t have guns. While this is possibly true it has no effect at all on the fact that without gun ownership we wouldn’t have so many gun accidents. You simply can’t make that argument at all unless you ignore reason. Every gun that is not sold in the US is a gun that will never accidently shoot a child. The corollary to this is that every gun that is sold increases the likelihood and therefore the number of children that will accidentally be shot. More gun ownership equals more accidental shootings of children. They are directly and indisputably linked.
Let’s go back to the original discussion. Suppose every mass killing in the US since 2010 had been headed off by the presence of a gun toting citizen capable and skilled enough to kill each of the cold blooded murdering shooters before they could get the first shot off. We would now have 154 more innocent people walking around unharmed in the US. We can leave off the sheer improbability of this occurring but these are the numbers. This is the very best scenario we could possibly have had happen by having an armed, trained, and somewhat prescient citizen who could see what was happening beforehand and kill the gunman before he has a chance to kill anyone else.
Unfortunately, we would still have over 3200 dead children who have been accidentally killed during that same time period because we have a fascination with gun ownership. I don’t know how we stop people intent on killing innocent people with guns. I suspect it is a price we pay for living in a free society. What I do know is that there is a direct correlation between innocent children dying from gunshot wounds and the number of guns that we own.
Wednesday, June 24, 2015
Sunday, November 17, 2013
Update Rates
Modern data acquisition systems that are used for gathering data during testing are now digital instead of analog. In layman's terms, snapshots of data are recorded at a specified rate and then lines are drawn between the snapshots. In the case of a pressure reading, an acquisition system records a pressure of say 100 psig and then records the pressure again some specified time later. A representative graph is then produced by connecting these readings with straight lines. In modern systems this rate can be very high, up to 50,000 times per second (50,000 hz). Naturally, matching sampling rate with signal rate becomes pretty important as you can get graphs that have no resemblance to reality if you don't correlate them correctly. Old movies wherein the wagon wheels appear to be spinning backwards are a good example of this error. The camera took a snapshot at a time rate that wasn't correlated and when these snapshots are spliced together the wheel appears to be spinning backwards. It turns out our mind does the same thing with optical data that we take in with our sense of sight.
I was reading a short article about update rates and the how that correlates to our understanding of time passing. According to the article humans have the ability to do optical updates in the 60 hz range. In other words, we can't do it much faster than that no matter what we do. Dogs and cats are in the 80-90 hz range. The author was putting forth the suggestion that this has to do with life expectancy AND suggesting that updating at a faster rate in effect makes the total time passage between life and death similar in both instances. Carrying this comparison a little further he went on to explain that the common fly has the ability to update in the 225-250 hz range. (This kind of explains why it is so hard to kill a fly with a fly swatter as we must move in extreme slow motion from their perspective). They also live a very short life... but .... is it true that it seems just as long to them?
Of course my mind instantly went off in several other directions on that same subject. I read some time ago that we seldom actually update at full speed. It simply takes up too much concentration and energy and for efficiency we usually observe something for long enough to establish a pattern and then slow down our update rates in favor of predictive snapshots taken occasionally only to confirm the pattern is correct. Presumably.... this means that the more comfortable we get with the idea that we don't need to fully utilize full update rates the slower this actually gets until it is at a rate that is only a very small energy drain. We can recalibrate and update faster when something is amiss and we sense that our prediction is wrong. This was all written in explanation of optical illusions and the fact that eyewitness accounts are often so wrong when it comes to the actual physics of what happened.
I found this interesting enough at the time but somehow the correlation between update rates and our understanding of the passage of time also triggered some completely new thoughts. I have been researching how aging affects the brain as I have noticed that I sometimes now struggle to recall words or terminology for a short period while discussing things with other people. What I discovered is that the brain is a lot like a processor in that it is very parallel but not necessarily extremely fast. As we age we start to form more connections but are not as parallel. In other words, we can pull up more detail and in depth understanding but not necessarily at the same speed. It is the difference between passing information at top speed and passing information at a slower speed but with more contingent connections. Upon reading this, I felt a little better as I noticed in my own case that the terminology came to me; it just sometimes was not instantaneous. It more or less matches what I have read about how this works.
All of this goes to explain my next connection from the update rate. One of the things I discovered in researching how the brain works is the oft quoted idea that exercising the brain is a necessary part of staying mentally sharp. I think that is pretty well known and accepted but the update thing suddenly added another dimension to the equation. Currently, there is a sort of cottage industry of sites such as luminosity pushing mental exercise word games and such as a means of keeping the brain agile and healthy. I think this will only work to a point. If we do crossword puzzles or any other similar activity we find that they get easier the more of them you do. We are so good at pattern recognition type thinking that we begin to see who people who design such things go about the process. I found this out years ago when I started doing crossword puzzles in our local morning paper. I struggled at first but soon could do them in a very short time period. However.... I found that when I tried to expand and do those in the evening paper or other publications I was not nearly as efficient at getting them done. I didn't put a whole lot of thought into why but I think it was simply pattern recognition of that particular author.
It seemed an arcane and ridiculous thing to spend a lot of time on at the time and I soon lost interest. Keeping in mind the update rate thing it suddenly dawned on me today that it isn't doing anything in particular that keeps our brain agile it is doing something we don't know how to do. In other words, it is the very process of learning something new that requires our concentration.... our focus... to the point that we are in effect straining the bounds of that update rate and making our brain work at full speed or full effort. That is the key I think. A new subject...... one that we have to constantly go back and forth to different sources and really rack our concentration out on is tiring but absolutely necessary for high brain function. In effect, it is the difference between jogging around the block and doing interval training. It is the heavy lifting of wading through something complicated enough to require our full attention that strengthens the thought process; not the comfortable recollection and repetition of something we know well.
If this is true.... and I think it demonstrably is; maybe it also explains why people are often more comfortable in shared belief systems. Having faith in why things occur is obviously much less taxing on the brain than searching for reasons why things occur. It also explains why most people prefer affirmation to information. Maybe I should start a research project correlating intellectual curiousity with early onset dementia and Alzheimer's.
What does all this mean? Maybe it means I have too much time on my hands... but more likely it is just another manifestation of somehow needing to understand how everything ties together.
I was reading a short article about update rates and the how that correlates to our understanding of time passing. According to the article humans have the ability to do optical updates in the 60 hz range. In other words, we can't do it much faster than that no matter what we do. Dogs and cats are in the 80-90 hz range. The author was putting forth the suggestion that this has to do with life expectancy AND suggesting that updating at a faster rate in effect makes the total time passage between life and death similar in both instances. Carrying this comparison a little further he went on to explain that the common fly has the ability to update in the 225-250 hz range. (This kind of explains why it is so hard to kill a fly with a fly swatter as we must move in extreme slow motion from their perspective). They also live a very short life... but .... is it true that it seems just as long to them?
Of course my mind instantly went off in several other directions on that same subject. I read some time ago that we seldom actually update at full speed. It simply takes up too much concentration and energy and for efficiency we usually observe something for long enough to establish a pattern and then slow down our update rates in favor of predictive snapshots taken occasionally only to confirm the pattern is correct. Presumably.... this means that the more comfortable we get with the idea that we don't need to fully utilize full update rates the slower this actually gets until it is at a rate that is only a very small energy drain. We can recalibrate and update faster when something is amiss and we sense that our prediction is wrong. This was all written in explanation of optical illusions and the fact that eyewitness accounts are often so wrong when it comes to the actual physics of what happened.
I found this interesting enough at the time but somehow the correlation between update rates and our understanding of the passage of time also triggered some completely new thoughts. I have been researching how aging affects the brain as I have noticed that I sometimes now struggle to recall words or terminology for a short period while discussing things with other people. What I discovered is that the brain is a lot like a processor in that it is very parallel but not necessarily extremely fast. As we age we start to form more connections but are not as parallel. In other words, we can pull up more detail and in depth understanding but not necessarily at the same speed. It is the difference between passing information at top speed and passing information at a slower speed but with more contingent connections. Upon reading this, I felt a little better as I noticed in my own case that the terminology came to me; it just sometimes was not instantaneous. It more or less matches what I have read about how this works.
All of this goes to explain my next connection from the update rate. One of the things I discovered in researching how the brain works is the oft quoted idea that exercising the brain is a necessary part of staying mentally sharp. I think that is pretty well known and accepted but the update thing suddenly added another dimension to the equation. Currently, there is a sort of cottage industry of sites such as luminosity pushing mental exercise word games and such as a means of keeping the brain agile and healthy. I think this will only work to a point. If we do crossword puzzles or any other similar activity we find that they get easier the more of them you do. We are so good at pattern recognition type thinking that we begin to see who people who design such things go about the process. I found this out years ago when I started doing crossword puzzles in our local morning paper. I struggled at first but soon could do them in a very short time period. However.... I found that when I tried to expand and do those in the evening paper or other publications I was not nearly as efficient at getting them done. I didn't put a whole lot of thought into why but I think it was simply pattern recognition of that particular author.
It seemed an arcane and ridiculous thing to spend a lot of time on at the time and I soon lost interest. Keeping in mind the update rate thing it suddenly dawned on me today that it isn't doing anything in particular that keeps our brain agile it is doing something we don't know how to do. In other words, it is the very process of learning something new that requires our concentration.... our focus... to the point that we are in effect straining the bounds of that update rate and making our brain work at full speed or full effort. That is the key I think. A new subject...... one that we have to constantly go back and forth to different sources and really rack our concentration out on is tiring but absolutely necessary for high brain function. In effect, it is the difference between jogging around the block and doing interval training. It is the heavy lifting of wading through something complicated enough to require our full attention that strengthens the thought process; not the comfortable recollection and repetition of something we know well.
If this is true.... and I think it demonstrably is; maybe it also explains why people are often more comfortable in shared belief systems. Having faith in why things occur is obviously much less taxing on the brain than searching for reasons why things occur. It also explains why most people prefer affirmation to information. Maybe I should start a research project correlating intellectual curiousity with early onset dementia and Alzheimer's.
What does all this mean? Maybe it means I have too much time on my hands... but more likely it is just another manifestation of somehow needing to understand how everything ties together.
Sunday, November 3, 2013
Work Ethic
Occasionally, something happens in the periphery of my life that really makes me angry. Usually it has something to do with a personal acquaintance but it can be more random. I was raised in a manner that probably doesn't occur that much anymore in that my parents instilled in me a work ethic that is very prevalent in my world view. In other words, any task that is worth doing is worth doing to the ultimate of your ability. I seldom do anything at less than a full effort as I not only feel it is the right thing to do; I get a sense of satisfaction from the effort as well.
The other side of this ethic is the idea that life is often unfair. Reality teaches us that the concept of fair seldom is the overriding concern in nature so to expect that life will be fair is to put yourself in for a lot of disappointment. Better to understand that fair is a human concept and one that seldom actually applies across the wide spectrum of our lives except as a goal. Don't get me wrong, I have great respect for the concept of being fair and feel that it is a fundamental goal in our relationship with other people. However, to expect that everything in life will be fair is not very realistic.
I have always felt that employment is simply an extension of myself. In other words, I don't separate my working life from my personal aspirations of how to treat other people. If I work for someone, I do my level best to give them the best return on the investment they are making in me. Again, it is not simply an ethical concern, it is part of the self satisfaction I derive from my work and the catalyst for going to work in the first place. I have been lucky enough to have worked in industries where I enjoy my work. Either that or I have never stayed in a job that I didn't enjoy, but I honestly don't remember a job that I had where I hated going to work every day. I have had some rough jobs, working in sweat shop manufacturing, farm work, construction work on many different levels, and even worked for a while in retail sales when I was in high school. I always derived a sense of satisfaction from doing the job and doing it well. I can't say I would have done the jobs without getting pay, but I also would not say that I ever did a job that I didn't derive a sense of satisfaction from.
Recently, I have become aware of a shift in how jobs are perceived. The last few years have been very hard on those seeking employment as unemployment has hit and lingered at levels that were simply unheard of for much of my working life. I won't bother to go into the realities of how such numbers are computed but it seems rather obvious that jobs are much harder to come by today than at any point in memory. Beyond that, most jobs that are available are low paying jobs with little or no opportunity for real advancement. This has led to a situation where there is excess of labor and very little demand of anything but the barest minimum of skilled labor in most jobs that are available. It has also created an ideology amongst business owners that I find to be dangerous and destructive.
Many businesses now operate on a business model that considers the excess of labor as their own private disposable pool of labor. We are seeing that play out in ways that simply didn't exist for much of this half of the last century. Wal-Mart is just one example of an entity that subsists largely off of that pool of labor but there are many, many more very successful and wealth corporate entities that use this same model. The long and the short of this model is that most employees wind up working less than full time so that they get no benefits. This would not be possible if unemployment was not rampant and a lot of these corporations fully realize this and lobby accordingly.
Free market adherents point out that this is perfectly acceptable under our system without admitting that this is not a free market in reality. Many of these industries take full advantage of government subsidies and tax breaks to build their business and in effect utilize government assistance programs to subsidize the ability of their employees to subsist on the wages they pay them. In other words, the government subsidizes their profits by making up the slack in what their employees make while at the same time giving massive tax breaks to the corporation up front. This system actually has no resemblance at all to a free market but you won't hear that view espoused very often.
I see this scenario playing out over and over again with my daughter's friends. The same people that rail against the work ethic of our youth and insist on cutting government assistance programs make huge profits off of the system through tax breaks and stock investments. I see the same germination of a work ethic in my daughter's friends that I am so familiar with but it is being strangled by a system that treats them like so many cogs in a machine. They struggle to subsist on wages little above minimum wage while their hours are cut and they are increasingly treated with less respect and more disdain from the people who profit from their labor. Small business owners short their hours, demand faster and more efficient use of their time while at the same time complaining that their employees have no loyalty.
Ethics is a two way street. You cannot treat people with no respect and expect to get respect in return. That has nothing to do with fairness and everything to do with reality. There has been a lot of publicity lately about how skewed our economic distribution system has become. Corporate leaders now make 700 times what their employees make as a national average. Small business owners seem to have taken this ratio to heart as well. While I have not seen real numbers on this difference, I can see by direct observation that the ratio at this level is well out of balance. Employees who work 32 hours a week at less than $10 an hour support business owners who make hundreds of thousands of dollars a year and call themselves job creators in a self-congratulatory way.
These same business owners rail against paying taxes while at the same time offering jobs that make it impossible for their employees to make a wage high enough to support themselves. Most are presently realigning their work scheduling to make sure that they are not liable for providing health care coverage for their employees under the new law. While this saves them money on the front end, it inevitably costs them more money on the long end when these employees are later forced to seek the most expensive care in the free world at hospital emergency rooms. These costs are then passed on to everyone else in the form of higher insurance premiums to cover these exorbitant costs to the system. In other words, those who have insurance subsidize those who don't while business owners reap the difference in profit margins.
The point of my most recent anger came in a conversation with my daughter the other night. The small business owner she has worked for the last few years is expanding his business. He has a fairly loyal group of steady employees who have worked for him for the last few years; so much so that he rarely makes an appearance at his business except to pick up money and distribute paychecks. As a part of his expansion he is asking this core group of employees to help train new employees and establish his new business in another community. This means a further trip to work, more responsibility, and more headaches for everyone.
In order to deal with these problems he has established a new policy requiring all employees to come to a weekly organizational meeting at the new place of business. In fairness to him, all these employees have received a modest increase in pay for their new responsibilities. However, these new required meetings are to be attended on their own time. His employees are all hourly employees but are expected to increase their attendance of off work meetings for which they will not get paid.
This is a point of contention to the point of outright anger with me. Every employer can choose to employ their people as hourly wage earners or as salaried employees. As there are advantages and disadvantages to each system, it is a matter of choosing which is best for the employer as employees seldom get the chance to choose. Having chosen to pay people on an hourly basis because it is most beneficial to the owner, it is both ethically reprehensible and illegal to then demand these employees attend meetings for which they will not be paid. These meetings are not so that the employees can advance their prospects or increase their earning power they are called so that the owner can advance his personal prospects and increase his profits.
I would venture to say that most small businesses still realize that it is their employees who make or break their business. Somehow, many can't seem to make the connection between treating their employees with respect and having their employees' respect in return. After all, loyalty and respect are simply outgrowths of this basic concept of human ethics. Give and you shall receive is accepted as a concrete truth without understanding that it is impossible to continuously receive without giving. Unfortunately, many of these concepts of honesty, integrity, and basic human consideration have been replaced with simple greed and profit maximization at the expense of all else.
I have made every effort to teach my daughter the value of work and ethical honesty. If you work for someone you owe them your best effort and your absolute honesty. The current economic situation of disposable labor makes a mockery of all of these ideals. I am tired of seeing the same people who rail about work ethics utilize business practices devoid of ethics of any kind. People learn by example and we are teaching a whole generation of workers that ethics and work are mutually exclusive. I cannot say what the results of this type of business model will be with any certainty. Whatever the result will be, they are multiplied in effect by the duration that we allow this to continue and I see no end in sight.
The other side of this ethic is the idea that life is often unfair. Reality teaches us that the concept of fair seldom is the overriding concern in nature so to expect that life will be fair is to put yourself in for a lot of disappointment. Better to understand that fair is a human concept and one that seldom actually applies across the wide spectrum of our lives except as a goal. Don't get me wrong, I have great respect for the concept of being fair and feel that it is a fundamental goal in our relationship with other people. However, to expect that everything in life will be fair is not very realistic.
I have always felt that employment is simply an extension of myself. In other words, I don't separate my working life from my personal aspirations of how to treat other people. If I work for someone, I do my level best to give them the best return on the investment they are making in me. Again, it is not simply an ethical concern, it is part of the self satisfaction I derive from my work and the catalyst for going to work in the first place. I have been lucky enough to have worked in industries where I enjoy my work. Either that or I have never stayed in a job that I didn't enjoy, but I honestly don't remember a job that I had where I hated going to work every day. I have had some rough jobs, working in sweat shop manufacturing, farm work, construction work on many different levels, and even worked for a while in retail sales when I was in high school. I always derived a sense of satisfaction from doing the job and doing it well. I can't say I would have done the jobs without getting pay, but I also would not say that I ever did a job that I didn't derive a sense of satisfaction from.
Recently, I have become aware of a shift in how jobs are perceived. The last few years have been very hard on those seeking employment as unemployment has hit and lingered at levels that were simply unheard of for much of my working life. I won't bother to go into the realities of how such numbers are computed but it seems rather obvious that jobs are much harder to come by today than at any point in memory. Beyond that, most jobs that are available are low paying jobs with little or no opportunity for real advancement. This has led to a situation where there is excess of labor and very little demand of anything but the barest minimum of skilled labor in most jobs that are available. It has also created an ideology amongst business owners that I find to be dangerous and destructive.
Many businesses now operate on a business model that considers the excess of labor as their own private disposable pool of labor. We are seeing that play out in ways that simply didn't exist for much of this half of the last century. Wal-Mart is just one example of an entity that subsists largely off of that pool of labor but there are many, many more very successful and wealth corporate entities that use this same model. The long and the short of this model is that most employees wind up working less than full time so that they get no benefits. This would not be possible if unemployment was not rampant and a lot of these corporations fully realize this and lobby accordingly.
Free market adherents point out that this is perfectly acceptable under our system without admitting that this is not a free market in reality. Many of these industries take full advantage of government subsidies and tax breaks to build their business and in effect utilize government assistance programs to subsidize the ability of their employees to subsist on the wages they pay them. In other words, the government subsidizes their profits by making up the slack in what their employees make while at the same time giving massive tax breaks to the corporation up front. This system actually has no resemblance at all to a free market but you won't hear that view espoused very often.
I see this scenario playing out over and over again with my daughter's friends. The same people that rail against the work ethic of our youth and insist on cutting government assistance programs make huge profits off of the system through tax breaks and stock investments. I see the same germination of a work ethic in my daughter's friends that I am so familiar with but it is being strangled by a system that treats them like so many cogs in a machine. They struggle to subsist on wages little above minimum wage while their hours are cut and they are increasingly treated with less respect and more disdain from the people who profit from their labor. Small business owners short their hours, demand faster and more efficient use of their time while at the same time complaining that their employees have no loyalty.
Ethics is a two way street. You cannot treat people with no respect and expect to get respect in return. That has nothing to do with fairness and everything to do with reality. There has been a lot of publicity lately about how skewed our economic distribution system has become. Corporate leaders now make 700 times what their employees make as a national average. Small business owners seem to have taken this ratio to heart as well. While I have not seen real numbers on this difference, I can see by direct observation that the ratio at this level is well out of balance. Employees who work 32 hours a week at less than $10 an hour support business owners who make hundreds of thousands of dollars a year and call themselves job creators in a self-congratulatory way.
These same business owners rail against paying taxes while at the same time offering jobs that make it impossible for their employees to make a wage high enough to support themselves. Most are presently realigning their work scheduling to make sure that they are not liable for providing health care coverage for their employees under the new law. While this saves them money on the front end, it inevitably costs them more money on the long end when these employees are later forced to seek the most expensive care in the free world at hospital emergency rooms. These costs are then passed on to everyone else in the form of higher insurance premiums to cover these exorbitant costs to the system. In other words, those who have insurance subsidize those who don't while business owners reap the difference in profit margins.
The point of my most recent anger came in a conversation with my daughter the other night. The small business owner she has worked for the last few years is expanding his business. He has a fairly loyal group of steady employees who have worked for him for the last few years; so much so that he rarely makes an appearance at his business except to pick up money and distribute paychecks. As a part of his expansion he is asking this core group of employees to help train new employees and establish his new business in another community. This means a further trip to work, more responsibility, and more headaches for everyone.
In order to deal with these problems he has established a new policy requiring all employees to come to a weekly organizational meeting at the new place of business. In fairness to him, all these employees have received a modest increase in pay for their new responsibilities. However, these new required meetings are to be attended on their own time. His employees are all hourly employees but are expected to increase their attendance of off work meetings for which they will not get paid.
This is a point of contention to the point of outright anger with me. Every employer can choose to employ their people as hourly wage earners or as salaried employees. As there are advantages and disadvantages to each system, it is a matter of choosing which is best for the employer as employees seldom get the chance to choose. Having chosen to pay people on an hourly basis because it is most beneficial to the owner, it is both ethically reprehensible and illegal to then demand these employees attend meetings for which they will not be paid. These meetings are not so that the employees can advance their prospects or increase their earning power they are called so that the owner can advance his personal prospects and increase his profits.
I would venture to say that most small businesses still realize that it is their employees who make or break their business. Somehow, many can't seem to make the connection between treating their employees with respect and having their employees' respect in return. After all, loyalty and respect are simply outgrowths of this basic concept of human ethics. Give and you shall receive is accepted as a concrete truth without understanding that it is impossible to continuously receive without giving. Unfortunately, many of these concepts of honesty, integrity, and basic human consideration have been replaced with simple greed and profit maximization at the expense of all else.
I have made every effort to teach my daughter the value of work and ethical honesty. If you work for someone you owe them your best effort and your absolute honesty. The current economic situation of disposable labor makes a mockery of all of these ideals. I am tired of seeing the same people who rail about work ethics utilize business practices devoid of ethics of any kind. People learn by example and we are teaching a whole generation of workers that ethics and work are mutually exclusive. I cannot say what the results of this type of business model will be with any certainty. Whatever the result will be, they are multiplied in effect by the duration that we allow this to continue and I see no end in sight.
Friday, October 11, 2013
Somalia; Libertarian Paradise
Somalia is a country on the horn of Africa slightly smaller than Texas. It is controlled by a very weak Federal Government which is ostensibly Democratic. It is divided into eighteen administrative districts, each of which is further divided into five or six smaller districts. The Federal Government mainly concerns itself with Defense and the people pay little or no Federal Tax. There is no Federal Reserve, there is no Medicaid, Medicare, or welfare to suck up the people's hard earned taxes because there is little taxation except to pay for the military and the corruption of those in power in every part of the country.
There is no gun control as automatic weapons are prevalent and necessary for basic survival. If you don't have one, someone who does will regularly relieve you of anything else you do have. All real power resides at the local level and is usually utilized through the barrel of the aforementioned automatic weapons.
Somalia is one of the closest approximations to pure Libertarianism on the face of the planet. It is also one of the most corrupt and dangerous places on the face of the planet. It is a pure free market economy with little or no government welfare.
As a matter of fact, there are little or no regulations on anything. No FDA, no EPA, and no FCC to monitor the financial markets. According to Libertarian theory it should be the epitome of efficiency but we actually find that Somalia's national debt is $386 per capita. This sounds pretty good until one realizes that per capita income is about $333 per capita. In other words, Somalia manages to provide essentially no government services yet still have a large national debt. Of course there are a lot of political leaders both locally and nationally that manage to have large bank accounts. Interestingly, these are roughly the same people who have lots of automatic weapons and people to use them at their disposal.
Perhaps those in this country who wish to see government reduced to the size that it can be "drowned in a bathtub" could be enticed into moving somewhere where this situation exists in reality. Maybe we could set up a Tea Party exchange system wherein lucky participants who pine for such a system could be given a temporary visa to experience Libertarian nirvana firsthand.
Sunday, September 22, 2013
The Carter Failure
On December 12, 1974 Jimmy Carter announced his candidacy for the 1976 presidential nomination. He made this announcement in front of a gathering of the National Press Club. Carter’s speech contained within it a promise to reform health care:
The quality of health care in this Nation depends largely on economic status. It is often unavailable or costs too much. There is little commonality of effort between private and public health agencies or between physicians and other trained medical personnel. I expect the next Congress to pass a national health insurance law. But present government interest seems to be in merely shifting the costs of existing services to the federal taxpayer or to the employers. There is little interest in preventing the cripplers and killers of our people and providing improved health care for those who still need it most.Is a practical and comprehensive national health program beyond the capacity of our American government? I think not.
This speech was welcome news to Democrats pushing for Health Care Reform. It was well understood by this time that the Watergate Conspiracy and its inevitable backlash against the Republican Party would most likely result in a Democratic Congress and a Democratic President in the upcoming election. Carter's inclusion of health care reform in his domestic policy platform garnered support from many groups pushing for reform. The UAW had openly been pushing for health care reform for many years by this time. Religious, charity, and consumer groups were pushing for reform as well. Congress had shown an interest in passing legislation to address the runaway costs and the general public was feeling the pinch as well.
As I noted in my last post, Kennedy had been pressured not to accept a compromise bill with Nixon because many groups supporting a national health care insurance plan would be achievable with gains that Democrats would make in Congress, especially with a Democratic administration likely coming into office in the 1976 elections. Carter himself believed that such a program was needed, although it was soon to become apparent that he had few concrete ideas of how to implement such a plan. Medicare and Medicaid had been passed in the mid sixties. This had taken care of the immediate medical needs of the elderly and disabled. It did nothing to address the exploding costs that all other Americans were facing as technology advances in surgery and diagnostics along with the growth of organized large corporate health care providers drove costs ever higher. As health care costs steadily ate into the national GDP almost everyone understood that something had to give. However, what had to give was a very sticky problem.
The AMA and large health care providers were diligently protecting record profits as were the large healthcare insurance companies. The last thing either of these groups wanted to see was a system that would cut into these profits. As Carter came into office he immediately found himself dealing with runaway inflation and a stagnant economy. Between the necessity of holding down government expenditures and his administrative approach to formulating a new policy, health care reform became bogged down in power struggles within his administration. Carter delegated responsibility for coming up with a comprehensive plan to appointed committees which were largely composed of people with little experience in health care or reform policies. Carter himself spent a large amount of time and focus in consideration of numerous possible plans but never really decided on any one type of plan. Instead, he tried to combine the best options of a single pay system with compulsory insurance and selective benefit programs. To make matters worse, he found that differing groups within his own administration disagreed violently on priorities as the Office of Management and Budget believed such reforms would have little effect on quality of care but would drastically exacerbate inflation, unemployment, and investment policies.
Carter took office as inflation problems came to a head. During Nixon's term inflation had been a growing concern. Nixon tried to attack inflation with price controls and wage freezes. The reals cause of the inflation Nixon struggle so mightily with was largely a creation of his own. Nixon served as Vice-President under Eisenhower who was a notorious free market supporter. Eisenhower and his administration did little to try to control economic policy and as a result the economy was an up and down cycle. The economy under his administration grew at just a 2.5 % GDP rate over Eisenhower's eight years in the White House. This low growth was largely the result of three large recessions which drove down what was a much higher growth rate overall. The last of these three recessions occurred in April of 1960 and lasted through February of 1961. Eisenhower's policy of riding out recessions without actively combatting them caused Nixon to run against Kennedy in 1960 during an economic downturn. Nixon blamed his defeat in this election on this downturn in his book Six Crises. Nixon was more pro-active in trying to control the economy when he was elected eight years later but had no control over Eisenhower's policy in the 1960 election even though he was running on his experience as Vice President. Nixon's defeat in this election soured him forever on hands off economic policy.
When he was elected in 1968 he became much more pro-active in trying to control economic policy as he understood the relationship between economic prosperity and re-election. The actual cause of the recession of 1959-1960 recession was a tightening of credit policy by the Federal Reserve Chairman at the time, William McChesney Martin, who had been appointed by Truman. Martin believed that it was the primary responsibility of the Federal Reserve to protect against inflation. When he saw such signs in 1959 he tightened credit policies by raising the prime interest rate which drove the country into recession. This is much the same policy that the Federal Reserve had followed since its inception. As one of the earliest leaders of the Federal Reserve had explained, "It's our job to take away the punchbowl when the party gets going." Accordingly, the Fed had historically raised interest rates when inflation began and lowered them to stimulate the economy when things slowed down.
When Martin's term was up in 1970, Nixon appointed Arthur Burns as head of the Federal Reserve in his place. Burns was a well respected economist and academic leader who had served on Eisenhower's economic policy council. Nixon, in conflict with tradition, believed that he should have influence over who he appointed to such a position and early on wrung an agreement to ensure easy credit for the time period surrounding his upcoming re-election campaign in 1972. As the election approached and plain signs of runaway inflation persisted, Burns began to resist Nixon's efforts to maintain easy credit policies. Negative press against Burns and other Federal Reserve Governors were planted in the newspapers along with threats of legislation to reduce the policy control of the Federal Reserve itself. Burns succumbed to the pressure and agreed to keep the credit policy loose, which only served to increase inflation.
After the election, the 1973 oil crisis caused further upward pressure and Nixon's price control policies failed completely as inflation was above 12% by 1973. By this time, Burns felt powerless to fight inflation without support from within the Treasury office and Congress as he understood the high unemployment would be the inevitable result of such a policy. This was the economic situation that Carter came into in 1976, largely unaware that a large recession was imminent. Today, Burns is largely regarded as one of the worst Chairmen ever to sit in that office. Historians don't agree as to whether Burns was unaware of the fallacy of doing nothing to control inflation or if he was simply too susceptible to political pressure to properly do his job. The simple fact that the Watergate burglars were found carrying $6300 of sequential numbered $100 bills probably further degraded his reputation as did his stonewalling of Congressional investigations into the matter. He then issued a directive to all Fed offices prohibiting any discussion of the subject.
Carter, noticeably reticent to influence the Federal Reserve, seemed incapable of either fighting inflation or stimulating the economy. In truth, it is virtually impossible to do both at the same time as it is necessary to raise interests rates to fight inflation which is directly opposite of stimulating the economy with easy credit. In 1979 Carter appointed Paul Volcker as Chairman of the Federal Reserve. Volcker immediately set about tightening credit even further until it reached as high as 20% in 1981. While Volcker is widely credited with ending the inflation that had plagued the economy since 1970, it is without question that his decisive policies further degraded economic prosperity during Carter's re-election campaign in 1980.
Early in his presidency, Carter charged the Department of Health, Education, and Welfare in charge of final policy formation for health care reform. The first action of HEW was to create four contrasting health insurance models, which served to further polarize supporters of reform. Carter's own administration argued so much internally over which plan to take that the head of HEW, Joseph Califano, advised Carter not to take a firm stand on any policy having to do with health care reform. As the economy worsened and deficits from oil prices and the Viet Nam war era drove debt levels higher, consensus for action weakened further. As the AMA and AHA, representing non-profit hospitals, mobilized against reform they were joined by for profit hospital groups and insurance companies. Political action committees were formed and large amounts of money form the Federation of American Hospitals began to find their way into the pockets of congress. Profits for these companies shot up some 40-50% per year in the late seventies as costs skyrocketed and they had no intention of allowing Carter or anyone else to kill the goose that was laying golden eggs.
In 1977, Kennedy still pushing for National Health Care Insurance, spoke at a UAW convention. He suggested the Carter was defaulting on his promise to reform health care and urged Carter to take action. Carter, in return, promised to have a bill ready by the end of 1978. Both Carter and Califano were surprised to learn how unprepared the HEW was to implement such a plan and time dragged on. Kennedy, growing impatient, submitted his own plan again in the press. When a plan was finally submitted to Kennedy it contained a phasing in process based upon an unspecified time schedule based upon inflation and fiscal policy to be determined by Carter and his administration.
Kennedy then came forward with his Health Care For All Americans Act, which would effectively guarantee universal coverage for all Americans. Carter responded with his own plan which he had named Healthcare. Carter's plan did not guarantee universal coverage and contained a large role for private insurance firms along the same lines as Nixon's earlier plan which Kennedy had turned down. Kennedy and Carter conducted negotiations to combine the plans in an acceptable alternate form and finally came to agreement on a compromise bill that was closer to Kennedy's bill with some concessions to the private insurance sector. By this time the 1980 election was approaching and the bill died a quick death in a Congress concerned with a stagnant economy and deficit issues.
Other plans were proposed with lesser universal support but the truth of the matter was that Congress was growing more concerned with other issues. The Iran hostage crisis further damaged Carter and disagreements with Kennedy over health care and many other issues led to him running against Carter in the 1980 Democratic primaries, further weakening the Democratic party prior to this election. There was a growing concern with a perpetually weak economy and what was seen as failing foreign policy. The inability of proponents of health care reform to work together combined with the financial opposition of those profiting most highly from the current system eventually spelled the doom of reform policy during Carter's administration.
The growth of Conservative movement efforts to limit government and increase corporate power in national politics found the perfect combination of unorganized opposition and a weak economy reinforced by Volcker's determination to throttle inflation to allow Conservatives to step into power. The election of Reagan and imposition of his policies ended the window of opportunity for reforming healthcare in this country for many years while at the same time increasing the wealth and power of those most opposed to any change that might cut into their growing profit margins.
Friday, September 13, 2013
Healthcare Reform Attempts During the Nixon Years
The passage of Medicare in 1965, while a momentous step for healthcare for the elderly, did little to address the issue of spiraling health care costs and its effects on the nation as a whole. Millions of Americans were feeling the squeeze of higher prices and no health insurance. Charts show that US health care expenditures have outgrown all other expenditures as a percentage of GDP since 1960. In the decade from 1960 through 1970 they grew some 2.5%. While this may not sound like much it is worth realizing that I am talking about the percentage of all the economic growth in the whole country that health care devours. In that decade the GDP doubled from 526 billion in 1960 to 1038 billion in 1970. This means that health care costs grew by more than 10 billion dollars in one decade. This was the beginning of the dominance of Insurance providers in the system. Previously, health care costs for most Americans, while expensive and growing had not been prohibitive. The 1960’s saw the beginning of the runaway costs that continue to swamp our economic system. By 1980 the growth rate as a percentage of GDP was another 2%. It has only climbed since. The 90’s saw a 5% increase. The next 20 years saw an even greater increase. The end result is that health care spending in this country has went from 5% of GDP in 1960 to a little over 20% presently and it is still climbing. We are now spending some 2.8 trillion a year on health care in this country which far outstrips what any other country in the world spends.
Politicians in the 60’s saw the groundswell in costs and how it was eating into economic growth. They viewed this with considerable concern as in our system economic growth is the metric we use to judge the health of the country. Anything that threatens this growth necessarily threatens the politicians’ main goal of getting re-elected. It got their attention in a big way. The cost to the average citizen soon came to be so high that it was impossible to survive financially without health care insurance. This essentially created a three party system wherein the end user (patient) had little connection with cost. The health care provider set costs and the insurance company paid the cost while the end user had no input into either.
A good analogy would be to take your car to a mechanic for a tune up; only in this case you don’t pay the cost of the tune up as you have a warranty you purchased from someone else. The people who sold you the warranty have a goal of maximizing the number of warranties they sell so the higher the mechanic’s cost is, the more warranties they sell because they depend on these high prices you can’t afford to pay in order to sell you a warranty. It is easy to see the higher costs greatly benefit two out of the three parties in this system; the mechanic and the seller of warranties. You don’t really pay much attention to the cost because your cost ends with the purchase of the warranty. The bad news is that every time costs go up the cost of a warranty goes up as well. This is a gradual increase that you don’t immediately feel; at least until you have to purchase another warranty. You might complain about it at that time but you know you have to purchase it as the cost of doing without it is even higher this time around. Without the warranty in the middle of your dealings with the mechanic you would simply take your car somewhere else when his costs get out of line with the competition.
In the health care industry this is not possible. Try going to your doctor and asking for an estimate before the next procedure you need. Not only is there no competition, if you have insurance you have no say so at all about what things cost. This is exactly the reason when you go into the doctor’s office for a head cold they weigh you, check your blood pressure, and collect urine samples. They have a shopping list from the insurance company that tells them exactly what they can charge for and they hit every item on the list. If you don’t believe this, try explaining that you don’t want to be weighed or have your blood pressure checked. They won’t mind, unless you also explain that you want a copy of the bill they are sending to the insurance company.
In a nutshell, it was the advent of this system that led to spiraling health care costs. We don’t have an insurance problem in this country; we have a health care cost problem. Without recognizing this we have no hope of solving the problem. Every step towards more private insurance is a step toward higher costs. The two groups who have caused this problem are the health care providers and the insurance companies. Asking them how to solve the problem is a lot like asking a fox to guard your chickens.
For much of Lyndon Johnson’s term he was pre-occupied with Viet Nam. He declared a War on Poverty but quickly found himself in so much hot water over the war in Southeast Asia that he had little time for anything else. The civil rights movement focused health care concerns on the disparity between white and black health care opportunities but little was actually done to address these issues during his term. When Nixon came into office he too was forced to deal with Viet Nam for much of his first term but he began to take up the banner of health care reform in 1971 as the election approached.
Nixon, for all his other faults, was actually quite interested in doing something about health care in the US for several reasons. He was alarmed at the growing cost to economic growth and was of course interested in furthering his re-election chances. However, there as a deeper interest for Nixon, a personal one. Nixon came from a relatively poor family originally. He lost a younger brother to Tuberculosis early on. A little later, he lost an older brother to the same disease. Nixon always believed that one or both of his brothers could have been saved if they could have afforded better care. As it was the family suffered greater economic hardship as a result of the treatments they did seek for the two boys and Nixon never forgot this. One of his first acts as a newly elected Congressman in 1947 was a proposal to institute a national health care program. He often pointed to the expense of what was eventually a cure for tuberculosis as proof that we needed a public-private partnership to advance medical science effectively.
Another player in the efforts to reform health care at the time was Edward Kennedy. Kennedy had his own reasons for his interest in health care issues. As a passenger in a private airplane crash in 1964 he has suffered extensive injuries that were to bother him for the rest of his life. During his recovery he began to understand the devastating costs of such accidents on ordinary citizens as he was to remark that he had no idea how other people could afford the care he received. In early 1973 his son, Edward, was diagnosed with a rare form of cancer that caused him to have his leg amputated. His son Patrick suffered severe asthma symptoms for much of his life. Kennedy gravitated toward health care issues early in his career and stuck to this interest for the rest of his political career. In 1968 he joined the new Committee for National Health Insurance which was founded by UAW president Walter Reuther. By August of 1970 he had introduced the first of many national health care insurance plans in Congress. He was to serve for a decade after 1971 as the chairman of the Subcommittee on Health and Scientific Research in the Senate.
Kennedy was known to have stronger political ambitions but an incident a Chappaquiddick in July of 1969 where a young girl died when Kennedy’s car careened into a creek after a night of partying probably ruined his chances of ever getting elected outside of Massachusetts. Kennedy had not reported the wreck until the next morning, fully aware that the girl had not escaped the car. He later suggested that he was in shock after the accident and had no explanation for his failure to report the accident or seek immediate help for the girl involved. An inquest later revealed that she survived the crash and died from lack of oxygen. A forensics expert suggested that she had lived for several hours breathing from a small air pocket in the submerged vehicle. Kennedy was pressured to run in 1972 opposing Nixon but he declined no doubt in large part over fear of more exposure to this incident.
In early 1971 Kennedy held public hearings around the country that exposed the support of the public for reform. More and more people were feeling the squeeze of higher costs and less access to health care. In an effort to control inflation Nixon had implemented wage and price freezes this same year but everyone recognized that the expiration of these freezes would cause more pressure. The specific price controls for health care centered around limits on increases in physician and hospital charges but insurance premiums continued to climb.
Kennedy’s first reform proposal in 1971 called for a National Health Insurance that was to be a single payer plan financed by payroll tax deductions, a true national health care system that would for all intents and purposes eliminate the need for private insurance companies. For all intents and purposes it closely matched Nixon’s original proposal from his early days in Congress. However, things had changed since then and Nixon had two problems with Kennedy’s plan. The first problem was that it went against the interests of many of his most financially able supporters. The second problem was that he didn’t trust Kennedy and suspected that Kennedy would try to leverage his proposal into a run against Nixon in his upcoming re-election campaign. Kennedy was being pressured to do this very thing from some within the Democratic Party but he finally decided not to run.
In a recorded conversation in the White House in February of 1971 Nixon can be heard discussing the issue with John Ehrlichman, his domestic policy advisor. Ehrlichman proposed a Nixon plan that would rely heavily on Health Maintenance Organizations as a key component. They hoped this would kill several birds with one stone. It would be a tool to control costs by providing for more competitive pricing. It would facilitate a coverage option for those without insurance. It would be private sector based and profit driven, thereby soothing loud complaints from rich donors from the insurance industry. Best of all, it would be an alternative to Kennedy’s plan and one that Nixon felt he could gain support for in Congress.
Nixon took his plan to leaders in Congress. Realizing such a plan had to go through Wilbur Mills and his Ways and Means Committee; Nixon approached him and Russell Long of the Senate. Mills agreed to help push the bill but soon was approached by Kennedy. Kennedy, realizing the potential for universal coverage worked with Mills to produce a middle ground between his original proposal and that put forth by Nixon. The resulting bill contained employer mandates and personal cost-sharing with employees while utilizing private insurers as intermediaries. However, it also required employees to participate and was to be financed by a payroll tax. Insurance providers were fearful of the growing support for National Health Insurance and calculated that Nixon’s plan was the lesser of two evils. The AMA while steadily cranking up the “red scare” tactics against Kennedy’s plan as a socialist/communist plot campaigned less stringently against Nixon’s plan. Nixon’s reputation as a strong anti-communist made it harder to assail him on the issue and he was a Republican after all. They well recognized attacking Nixon would likely lead to a Democrat in the White House and like the Insurance providers were very afraid of a National Plan what might limit their control of prices or make them operate in a true free market.
The Mills-Kennedy compromise was rejected by Senate leader Long. Republicans found themselves in the middle of a choice between doing nothing and risking voter anger or appeasing the Chamber of Commerce and Insurance Company executives who financed much of their party. In 1973 Congress passed a stop gap measure in an attempt to head off the crisis. The Health Maintenance Organization Act required companies with over 25 employees who already offered health care insurance to off federally certified HMO options as well. It was thought that these plans would help hold down costs for the insured but it did nothing for those without insurance. In the final analysis the act did little to control costs because neither patients who were limited in their choice of doctors nor physicians who had prices dictated to them liked the plan. HMO’s actually eventually led to higher usage as the patients had less service based costs for doctor visits and insurance companies wound up spending more money in administering the plans than what traditional health care cost.
After Nixon’s election in 1972 Kennedy tried to work directly with Nixon to implement a major reform of the system. Nixon was less fearful of Kennedy as an opponent and both men wanted to implement a policy that would allow all Americans better access to health care. Nixon was soon pre-occupied with other problems however, and his desire to address health care issues became secondary. As inflation returned Nixon again activated price and wage freezes. This time, the freezes were much more unpopular with the public as well as business interests who were frustrated with a stagnant economy. On top of these issues Watergate began to take up more of his time and attention as the trail led closer to his advisors and eventually the Oval Office as well.
Kennedy’s secret negotiations with Nixon to implement a national plan soon fell victim to Kennedy’s ambition and Nixon’s resignation. As Nixon’s popularity waned Kennedy began to receive pressure from Labor groups not to compromise. They believed that Nixon’s impending downfall would almost surely usher in a Democratic candidate in the next election who would be more amenable to a National Health Care plan that would not contain compromise measures with Insurance providers. Kennedy hesitated until Nixon resigned only to find Ford to be more intransigent to the plan. Still, many supporters of National Health care were certain that they would have a better position after the 1976 election as Carter had already come out in favor of the plan publicly.
1974 was probably as close as we have ever been to having a National Health Care plan that provides equal access to healthcare for all Americans. There was every reason to believe that the incoming president would support such a plan and both the AMA and Insurance providers had their backs against the wall as Republicans lost office after office in the wake of the Watergate scandal.
In October of 1974, Wilbur Mills who had long privately supported health care reform while publicly working to find politically palatable incremental steps toward this goal managed to ruin his own reputation. US Park Police in Washington stopped his car for driving with the lights off. Mills was intoxicated and visibly scratched up from a confrontation with the passenger in the car. The passengers, upon seeing the police approach the car, leaped out and jumped into the nearby Tidal Basin in a drunken attempt to escape. Annabelle Battistella was her name but she was better known by her stage name, Fanne Foxe. Fanne was a stripper from Argentina who had quite a following in the area. The police escorted her to St. Elizabeth’s Mental Hospital and Mills went home. He was re-elected a month later despite the growing scandal but managed to ruin what was left of his reputation by appearing onstage in a drunken state at a burlesque house in Boston where Fanne was performing a month later. To remove all doubt about his physical drunkenness he then called an impromptu press conference in her dressing room afterwards. Shortly after this incident Mills stepped down as chairman of the Ways and Means Committee, joined Alcoholics Anonymous and checked into a treatment facility.
Politicians in the 60’s saw the groundswell in costs and how it was eating into economic growth. They viewed this with considerable concern as in our system economic growth is the metric we use to judge the health of the country. Anything that threatens this growth necessarily threatens the politicians’ main goal of getting re-elected. It got their attention in a big way. The cost to the average citizen soon came to be so high that it was impossible to survive financially without health care insurance. This essentially created a three party system wherein the end user (patient) had little connection with cost. The health care provider set costs and the insurance company paid the cost while the end user had no input into either.
A good analogy would be to take your car to a mechanic for a tune up; only in this case you don’t pay the cost of the tune up as you have a warranty you purchased from someone else. The people who sold you the warranty have a goal of maximizing the number of warranties they sell so the higher the mechanic’s cost is, the more warranties they sell because they depend on these high prices you can’t afford to pay in order to sell you a warranty. It is easy to see the higher costs greatly benefit two out of the three parties in this system; the mechanic and the seller of warranties. You don’t really pay much attention to the cost because your cost ends with the purchase of the warranty. The bad news is that every time costs go up the cost of a warranty goes up as well. This is a gradual increase that you don’t immediately feel; at least until you have to purchase another warranty. You might complain about it at that time but you know you have to purchase it as the cost of doing without it is even higher this time around. Without the warranty in the middle of your dealings with the mechanic you would simply take your car somewhere else when his costs get out of line with the competition.
In the health care industry this is not possible. Try going to your doctor and asking for an estimate before the next procedure you need. Not only is there no competition, if you have insurance you have no say so at all about what things cost. This is exactly the reason when you go into the doctor’s office for a head cold they weigh you, check your blood pressure, and collect urine samples. They have a shopping list from the insurance company that tells them exactly what they can charge for and they hit every item on the list. If you don’t believe this, try explaining that you don’t want to be weighed or have your blood pressure checked. They won’t mind, unless you also explain that you want a copy of the bill they are sending to the insurance company.
In a nutshell, it was the advent of this system that led to spiraling health care costs. We don’t have an insurance problem in this country; we have a health care cost problem. Without recognizing this we have no hope of solving the problem. Every step towards more private insurance is a step toward higher costs. The two groups who have caused this problem are the health care providers and the insurance companies. Asking them how to solve the problem is a lot like asking a fox to guard your chickens.
For much of Lyndon Johnson’s term he was pre-occupied with Viet Nam. He declared a War on Poverty but quickly found himself in so much hot water over the war in Southeast Asia that he had little time for anything else. The civil rights movement focused health care concerns on the disparity between white and black health care opportunities but little was actually done to address these issues during his term. When Nixon came into office he too was forced to deal with Viet Nam for much of his first term but he began to take up the banner of health care reform in 1971 as the election approached.
Nixon, for all his other faults, was actually quite interested in doing something about health care in the US for several reasons. He was alarmed at the growing cost to economic growth and was of course interested in furthering his re-election chances. However, there as a deeper interest for Nixon, a personal one. Nixon came from a relatively poor family originally. He lost a younger brother to Tuberculosis early on. A little later, he lost an older brother to the same disease. Nixon always believed that one or both of his brothers could have been saved if they could have afforded better care. As it was the family suffered greater economic hardship as a result of the treatments they did seek for the two boys and Nixon never forgot this. One of his first acts as a newly elected Congressman in 1947 was a proposal to institute a national health care program. He often pointed to the expense of what was eventually a cure for tuberculosis as proof that we needed a public-private partnership to advance medical science effectively.
Another player in the efforts to reform health care at the time was Edward Kennedy. Kennedy had his own reasons for his interest in health care issues. As a passenger in a private airplane crash in 1964 he has suffered extensive injuries that were to bother him for the rest of his life. During his recovery he began to understand the devastating costs of such accidents on ordinary citizens as he was to remark that he had no idea how other people could afford the care he received. In early 1973 his son, Edward, was diagnosed with a rare form of cancer that caused him to have his leg amputated. His son Patrick suffered severe asthma symptoms for much of his life. Kennedy gravitated toward health care issues early in his career and stuck to this interest for the rest of his political career. In 1968 he joined the new Committee for National Health Insurance which was founded by UAW president Walter Reuther. By August of 1970 he had introduced the first of many national health care insurance plans in Congress. He was to serve for a decade after 1971 as the chairman of the Subcommittee on Health and Scientific Research in the Senate.
Kennedy was known to have stronger political ambitions but an incident a Chappaquiddick in July of 1969 where a young girl died when Kennedy’s car careened into a creek after a night of partying probably ruined his chances of ever getting elected outside of Massachusetts. Kennedy had not reported the wreck until the next morning, fully aware that the girl had not escaped the car. He later suggested that he was in shock after the accident and had no explanation for his failure to report the accident or seek immediate help for the girl involved. An inquest later revealed that she survived the crash and died from lack of oxygen. A forensics expert suggested that she had lived for several hours breathing from a small air pocket in the submerged vehicle. Kennedy was pressured to run in 1972 opposing Nixon but he declined no doubt in large part over fear of more exposure to this incident.
In early 1971 Kennedy held public hearings around the country that exposed the support of the public for reform. More and more people were feeling the squeeze of higher costs and less access to health care. In an effort to control inflation Nixon had implemented wage and price freezes this same year but everyone recognized that the expiration of these freezes would cause more pressure. The specific price controls for health care centered around limits on increases in physician and hospital charges but insurance premiums continued to climb.
Kennedy’s first reform proposal in 1971 called for a National Health Insurance that was to be a single payer plan financed by payroll tax deductions, a true national health care system that would for all intents and purposes eliminate the need for private insurance companies. For all intents and purposes it closely matched Nixon’s original proposal from his early days in Congress. However, things had changed since then and Nixon had two problems with Kennedy’s plan. The first problem was that it went against the interests of many of his most financially able supporters. The second problem was that he didn’t trust Kennedy and suspected that Kennedy would try to leverage his proposal into a run against Nixon in his upcoming re-election campaign. Kennedy was being pressured to do this very thing from some within the Democratic Party but he finally decided not to run.
In a recorded conversation in the White House in February of 1971 Nixon can be heard discussing the issue with John Ehrlichman, his domestic policy advisor. Ehrlichman proposed a Nixon plan that would rely heavily on Health Maintenance Organizations as a key component. They hoped this would kill several birds with one stone. It would be a tool to control costs by providing for more competitive pricing. It would facilitate a coverage option for those without insurance. It would be private sector based and profit driven, thereby soothing loud complaints from rich donors from the insurance industry. Best of all, it would be an alternative to Kennedy’s plan and one that Nixon felt he could gain support for in Congress.
Nixon took his plan to leaders in Congress. Realizing such a plan had to go through Wilbur Mills and his Ways and Means Committee; Nixon approached him and Russell Long of the Senate. Mills agreed to help push the bill but soon was approached by Kennedy. Kennedy, realizing the potential for universal coverage worked with Mills to produce a middle ground between his original proposal and that put forth by Nixon. The resulting bill contained employer mandates and personal cost-sharing with employees while utilizing private insurers as intermediaries. However, it also required employees to participate and was to be financed by a payroll tax. Insurance providers were fearful of the growing support for National Health Insurance and calculated that Nixon’s plan was the lesser of two evils. The AMA while steadily cranking up the “red scare” tactics against Kennedy’s plan as a socialist/communist plot campaigned less stringently against Nixon’s plan. Nixon’s reputation as a strong anti-communist made it harder to assail him on the issue and he was a Republican after all. They well recognized attacking Nixon would likely lead to a Democrat in the White House and like the Insurance providers were very afraid of a National Plan what might limit their control of prices or make them operate in a true free market.
The Mills-Kennedy compromise was rejected by Senate leader Long. Republicans found themselves in the middle of a choice between doing nothing and risking voter anger or appeasing the Chamber of Commerce and Insurance Company executives who financed much of their party. In 1973 Congress passed a stop gap measure in an attempt to head off the crisis. The Health Maintenance Organization Act required companies with over 25 employees who already offered health care insurance to off federally certified HMO options as well. It was thought that these plans would help hold down costs for the insured but it did nothing for those without insurance. In the final analysis the act did little to control costs because neither patients who were limited in their choice of doctors nor physicians who had prices dictated to them liked the plan. HMO’s actually eventually led to higher usage as the patients had less service based costs for doctor visits and insurance companies wound up spending more money in administering the plans than what traditional health care cost.
After Nixon’s election in 1972 Kennedy tried to work directly with Nixon to implement a major reform of the system. Nixon was less fearful of Kennedy as an opponent and both men wanted to implement a policy that would allow all Americans better access to health care. Nixon was soon pre-occupied with other problems however, and his desire to address health care issues became secondary. As inflation returned Nixon again activated price and wage freezes. This time, the freezes were much more unpopular with the public as well as business interests who were frustrated with a stagnant economy. On top of these issues Watergate began to take up more of his time and attention as the trail led closer to his advisors and eventually the Oval Office as well.
Kennedy’s secret negotiations with Nixon to implement a national plan soon fell victim to Kennedy’s ambition and Nixon’s resignation. As Nixon’s popularity waned Kennedy began to receive pressure from Labor groups not to compromise. They believed that Nixon’s impending downfall would almost surely usher in a Democratic candidate in the next election who would be more amenable to a National Health Care plan that would not contain compromise measures with Insurance providers. Kennedy hesitated until Nixon resigned only to find Ford to be more intransigent to the plan. Still, many supporters of National Health care were certain that they would have a better position after the 1976 election as Carter had already come out in favor of the plan publicly.
1974 was probably as close as we have ever been to having a National Health Care plan that provides equal access to healthcare for all Americans. There was every reason to believe that the incoming president would support such a plan and both the AMA and Insurance providers had their backs against the wall as Republicans lost office after office in the wake of the Watergate scandal.
In October of 1974, Wilbur Mills who had long privately supported health care reform while publicly working to find politically palatable incremental steps toward this goal managed to ruin his own reputation. US Park Police in Washington stopped his car for driving with the lights off. Mills was intoxicated and visibly scratched up from a confrontation with the passenger in the car. The passengers, upon seeing the police approach the car, leaped out and jumped into the nearby Tidal Basin in a drunken attempt to escape. Annabelle Battistella was her name but she was better known by her stage name, Fanne Foxe. Fanne was a stripper from Argentina who had quite a following in the area. The police escorted her to St. Elizabeth’s Mental Hospital and Mills went home. He was re-elected a month later despite the growing scandal but managed to ruin what was left of his reputation by appearing onstage in a drunken state at a burlesque house in Boston where Fanne was performing a month later. To remove all doubt about his physical drunkenness he then called an impromptu press conference in her dressing room afterwards. Shortly after this incident Mills stepped down as chairman of the Ways and Means Committee, joined Alcoholics Anonymous and checked into a treatment facility.
Thursday, July 11, 2013
Healthcare for Profit
Approximately 85% of our health care costs in this country are for physician and hospital care. This is by far the largest bulk of our expenditures on healthcare. In the US we spend an average of $7960 per person per year on Health care. The world average is $2342 so we spend 339% of the international average on health care. Yet… we rank 37th on the World Health Care Organization’s ranking of national health care systems; right between Slovenia and Costa Rica who spend $2084 and $1059 respectively according to WHO for 2009.
The United States remains the only industrialized nation without a public health care system. Let’s look at why our costs are so high….
Doctors compensation
US General Practitioner- $161,000 Rest of the World- $78000
US Specialist Doctor- $230,000 Rest of the World- $107,000
While both of these are over 200% higher than the rest of the world this is not the whole story either…
Let’s start with our insurance system. Most Americans get their health insurance through a carrier that works with their employers. This was basically set up originally because the government helped subsidize it by offering tax breaks for employers who provided health insurance. The insurance companies liked it because it tied the insurance to people who were working and therefore less likely to have serious health issues that would cost a lot of money to treat. This has led to a system wherein the vast majority of Americans who have health insurance purchase it through their employer. Health insurance is just like car insurance in that it takes a lot of people who don’t file accident claims to pay for those who do. In effect, younger healthier employees who don’t file claims help balance out the system for the older employees who have more health problems.
Therefore, there is a large pool of employees paying into plans that do not file a lot of medical claims and therefore make this a profitable business for private health care insurance companies. However, as soon as these people retire or reach the age where they start to have more health problems they are no longer on the roles of the private health care carriers and become the problem of the government Medicare system. This is exactly why our system does not work and public health care systems do. A private health care carrier gets the benefit of receiving premiums for the part of our life where we don’t really need a lot of health care and then turns us over to the Medicare system when we do. By this time, the profit from a large pool of healthy people is in the pockets of a private health care insurer and the government is stuck with paying for all of our health care when we need it most.
In 2008 Wellpoint (one of the ten largest health care carriers in the country) reported total revenue of $61,579,200,000. From this total they reported a 4.07% profit. This comes out to $250,627,334 for one company. If we assume there are ten other companies with this same level of profit we are talking about 250 billion dollars in profit for health care companies that would go a long way towards solving our deficit problem because we could eliminate this by going to a public health care system. We must remember that privatize actually means profitize.
While some may claim that private companies are more efficient actual numbers in health care show this is not true. The average administration cost for private health care carriers is around 13% while the average administrative cost of Medicare is less than 2%. It is much simpler to administrate a system where everything is covered as there is no time spent trying to decide what is covered and what is not. Canada’s public health care system has similar administrative costs as do those in Great Britain and France.
How hospitals work…
Most public hospitals (including my local hospital) are now 501C non- profit corporations. They also get special dispensation from the Federal Government for providing community services such as free health care for indigents and uninsured. These dispensations mean they pay no income tax, no property tax, and no sales tax. They are also eligible for special loan rates and bond issue rates as a part of these dispensations.
Let’s look at what they actually do. Most hospitals average around 5-7% rate of people who either cannot pay for treatment or do not pay although many of the larger systems actually have knocked this rate down to around 2% and still maintained their tax exempt status. If you added up the taxes they are exempt from you would easily come up to the 45-50% range that they would be paying if they were not tax exempt so a 5% loss is very acceptable as they are in effect producing a 45% savings for their board of directors by providing free health care.
Hospitals have what are called “master charge” or “billable” rates that are used to calculate these numbers. Unfortunately, these “master charge” rates have little to do with actual costs. For example, if you go to the hospital without insurance and have a colonoscopy you will be charged from $6000 - $8000 dollars for this procedure. Blue Cross often settles these claims for less than $1000 (this just happened to my daughter). Plainly, the hospital cannot accept less than $1000 if the actual cost of the procedure is $8000 and stay in business so there is something very wrong with the math.
The only people who ever pay these “master charge” rates or those who do not have insurance or are indigent. In other words, the vast majority of them are not paid but are used by the hospital to estimate their loss to get their losses in the 5% range. However, the Federal Government has what are called DSH (Disproportionate Share Hospital) plans. These are funds that are available to reimburse hospitals for their losses through free health care. There were around 43 Billion dollars paid out on this plan in 2003. There are only two requirements that a hospital has to meet to receive these funds.
1) At least 1% of a facilties total in patients must be Medicaid patients
2) If the hospital offers obstetrical services, the hospital must provide at least two obstetricians with staff privileges who agree to serve Medicaid beneficiaries.
If the hospital meets these requirements they are eligible to receive up to 100% of their shortfalls due to Medicaid, Medicare, and uninsured patients.
Medicare typically pays 91-93% of all medical costs. Medicaid typically pays 45% of all medical costs with the rest made up by the states and DSH payments. However, since hospitals cannot collect 100% of their costs through these two programs they typically add a 38% fee to all private health care carrier bills to make this money up (even though it is usually totally reimbursed by DSH payments).
It is easy to see why our health care system is broken. We don't have a lack of insurance problem we have a cost of healthcare problem. Between insurance providers, doctors, and health care providers (hospitals and nursing homes) we have a system where it is impossible to track actual costs. This has led to the bloated, ineffective system we all struggle with when we need healthcare. Anyone who doesn't have healthcare insurance is one illness or accident away from bankruptcy. Anyone who does have healthcare insurance is paying through the nose for it and it will only increase as time goes by. We cannot solve the problem with more insurance. We have to get costs under control before we can even make a dent in it.
It really is quite simple. As long as we have a profit based system we will have healthcare that concentrates on the most profitable areas of healthcare; hospitalization, surgery, and major illness treatments. This is basically the reason that our healthcare system in this country does not resemble that of any other industrialized nation. It is also the reason why we are all at the mercy of insurance providers and hospitals. Last year, my mother passed away after a long stay in the hospital. She was in an automobile accident and later died from complications from that accident. The bill for the first month of her stay was over 600,000 dollars. You might want to keep that figure in mind if you think you can save enough to cover your own healthcare without Medicare under the current system. The plain and simple truth is that this is impossible for all but the wealthiest among us.
The next time you drive by your local hospital and notice the gleaming new buildings and constant expansion you might want to think about this post. The truth is that a large part of our national wealth and most all of our private wealth is eventually going into the coffers of insurance providers, doctors, and health care providers. They are sitting there just waiting because they know something you don't. If you live long enough, you will give them everything you have worked for your whole life in the last few months of your life.
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