Insurance, Health Care, and Captialism

There has been a great deal of debate lately about health care and health insurance, especially around the recently passed health care reform. The sides are a bit like this:

Democrats: Health care should be a right for all Americans. No one should suffer or even die from a treatable illness just because of a lack of means to pay.

Republicans: We cannot afford universal health care. It is too expensive and will bankrupt the government.

Normally, I would say right here why both sides are wrong, but in this case, both sides are right. No one should have to go without healthcare, especially anyone who is working as hard as they can to support themselves and their family. However, we cannot afford to insure everyone. It costs to much.

However, universal health care or not, with an increase in health care costs of 7% a year and inflation of 3% a year, it doesn't take an economic genius to realize that one day in the not to distant future no one will be able to afford health care.

Why does it cost so much?
There are a number of reasons why health care has become so expensive in this country, very few of which are actually being dealt with in any meaningful way by policy makers.

• Separation of consumer and payer
• Malpractice risks
• Overtesting/overprescribing
• End of life overspending

Separation of consumer and payer

This comes back to the discussion of the Free Market. The Free Market is an excellent tool for setting prices, and it is entirely missing in the health care market. Why? Because the consumer does not have any skin in the game. He has no reason to consider cost in his calculations. Hospital A is 15% more expensive than Hospital B without any better results? Who cares! The consumer is not paying for it.

Some will say that money should have nothing to do with health treatment. People should just get what they need. This makes some sense, but everything is a trade off. Everything has a value and a cost. Some tests and procedures are quite necessary, but others are less so. Only the consumer can decide what something is worth, but the consumer is out of the equation.

When someone decides if they want to take vitamins and what brand to buy, they will consider cost, and vitamins stay relatively affordable. However, insurance companies pay for prescription drugs, removing market pressure to keep prices reasonable, and prices go through the roof. People without insurance cannot afford their pills at all, and the higher costs are passed on to everyone through higher premiums.

Malpractice Risks

The concept of malpractice is that doctors will want to make sure that they do what they are supposed to because if they do not, they can be sued for all they are worth. Unfortunately, this system has gotten out of control in two ways. First, the payouts have gotten extreme enough that they throw off the calculus of the doctor's decisions. Second, the doctor can never be sure what the courts will use to decide if the doctor is liable.

Every doctor has malpractice insurance. That means that every malpractice case payout is actually spread among all doctors, thus passed on to the rest of us through the insurance companies' increased premiums. 

Overtesting/Overprescribing

When the doctors are terrified of malpractice, they want to cover all their bases... and cover them again... and maybe a third time just to be sure. No doctor was ever sued for malpractice for sending a patient for an unnecessary MRI. However, if there is a 0.05% chance that the patient may have something, better send him for the test just in case, because if he has that extremely unlikely affliction, you know that he's coming after you for his $1 million dollar settlement. What happens when every doctor orders an extra $1500 test for every patient. That's a lot of extra $1500 tests, and scientists keep inventing newer and more expensive tests that doctors will feel obligated to send patients for.

End of Life Overspending

I'm going to say something that doctors hate to face. Everyone, eventually, dies. Doesn't matter what you do for them. If you think that you can fight death, you've got another thing coming, but doctors pour an obscene effort into prolonging the lives of the terminally ill just a few more days. As this USAToday article discusses, tens of thousands of dollars are spent on treatment for people at end of life. Not only does this drain the coffers dramatically, it also makes those last few months less pleasant. How would you like to spend your last 6 months? Being poked and prodded in a most undignified way to fight the inevitable to the last, or resting comfortably at home with medication and treatment to ease your transition to the end? For me, I'll take the quiet, peaceful one that doesn't cost society $24,000. Of course, it doesn't matter what I want. There is no option. The doctors will decide how heroic their efforts will be to grant you immortality, the options usually being heroic, really heroic, and tortuously heroic.

None of this is particularly new. These problems are well known, but the current political discourse does not allow any room to discuss actual solutions. Instead, we rearrange deck chairs of "Death Panels" and "donut holes" while the ship sinks under the weight of massive health care costs.

Don't worry. We'll act on it eventually. America, like college students, tends to work better under an immediate crisis deadline than well in advance.

Stripping Away the Layers

Sometimes I have to search far an wide for topics to write about, and sometimes the topic comes to me in the form of a message from an old high school buddy from my home town. The issue is that a businessman wants to open a strip club in Framingham, Massachusetts. This friend of mine wanted me to join his Facebook Group opposing the move.

He told me that he did not want the club opening in his town because it would bring drugs, prostitution, gangs, zombies, plague, and cats and dogs living together. You know, the usual drill.

When issues get local like this, the usual Right/Left split tends to break down, but let's look at how a couple political stances think of strip clubs.

Economic Conservative - Strip clubs are a business like any other and should be allowed to exist within reasonable limitations. If there is demand for them, then they are justified.

Republican Style Conservative - Due to the religious influence of the modern Right, strip clubs are thought to be immoral, causing moral degradation and contributing to the breakdown of the American family and moral base.

Liberal - Strip clubs are misogynistic, creating an environment where women degrade themselves for money for the amusement of men.

It's an issue that both the modern Right and Left Wing movements can agree on, further opposed by the NIMBY (Not In My Back Yard) forces of whatever town the club is attempting to open in. It's good to know that when both sides agree, they are still wrong.

What is the end condition of either the Radical Right or Left Wing sexual agenda?

If the Radical Left had their way, anything "exploitive" would be banned: pornography, prostitution, stripping, etc. Anything deemed artistic might be safe, but only if it was not considered exploitive. If it was, the producer would probably be looking at a fine or jail time, not knowing beforehand if they were within or outside of the law.

If the Radical Right had their way, anything that they consider immoral would be outlawed. This starts with prostitution and would quickly expand to include stripping, exotic dancing (with clothes still on), and pornography. Where does it go next? Next it goes after erotic art and literature, which means any art or literature which anyone might consider erotic. Information on contraception and good sexual health and behavior is considered obscene and banned. (Which would shut down one of my favorite blogs.) Finally, people who engage in "immoral" behavior would face criminal persecution, including homosexuals, bisexuals, and practitioners of kink. (Under old Massachusetts laws, anything other than sex in the missionary position, even with your spouse, is sodomy.)

Remember back when there was a party that liked small government? Those days, as we know, have passed. Now both sides want bigger government, they just want it to do different things.

I have a fair amount of experience with strip clubs, although I have only once ever had the opportunity to step inside one. My experience is that many of my female friends have worked as strippers at a time when they lacked the skills to work other high paying jobs. These women could make between $200 and $500 a night. When one is trying to pay one's way through school or raise a child as a single mother, that beats the heck out of $320 a week for working 40 hours.

One might reasonably look at this and think that it is exploitive, but most of the women that I have spoken to who have worked as strippers, camgirls, pornographic models and in other similar fields did not feel exploited by the activity. Some felt that they exploited those who paid them, and most of them actually felt more confident for the fact that they had empirically demonstrated that they had the allure to convince men (and sometimes women) to not only admire them, but to pay considerable sums to do so.

Would it be better if we lived in a world where there were other options for poor women to make a good living without skills? Absolutely, I completely agree. However, we live in this world, and in this world, this is an opportunity that women have. I would also add that it is an opportunity that men do not have. I have certainly had times where I would have gladly shaken by tush on a stage if it would have paid my bills, and I would have felt great about it. Unfortunately for me, no one is willing to tip $20 to see me shake my hairy tail feather.

Back to the original topic, which is what a strip club does to a town that it moves into. Let us consider the concerns.

• Drugs
• Prostitution
• Lowered Property Values
• "Not What the Town Needs" 

Drugs

This is an argument made by someone who has never worked at a fast food restaurant. You want drugs, someone at your local Royal McBurger will gladly supersize some for you. I knew someone who had to quit a job at a restaurant because she was trying to kick a drug habit, and it was hard to do so with all of her co-workers being drug users. I'm not saying that all fast food restaurants are dens of vice, but I am saying that you are more likely to find drugs in the back room of a fast food joint than a reputable strip club in a town that diligently enforces the law.

Prostitution

As Chris Rock said, there is no sex in the Champaigne room. People of Framingham, I have some bad news for you. There is already prostitution in your town. I don't know where, and I don't know who, but I am quite sure that it is happening, and existence of a strip club is not going to cause an explosion of hooking in the street. If anything, it might give the women who are forced by economic circumstance to solicit the chance to work a legitimate job stripping.

Lowered Property Values

This one I can understand. Take a look at this club in Oxford, MA. It is a pretty disreputable place.

And when I say disreputable, I actually mean that it looks a bit like an old courthouse out in Spencer. If the town is that concerned about appearance, they can place rules on the appearance.

Not What This Town Needs

This is a classic argument. "This town needs to focus on businesses that will bring jobs to this community, not smut shops!" Well, unfortunately, businesses that bring jobs are not knocking on your door. This strip club is. Let's talk about what this town and every town in America needs: tax money and jobs. Most strip clubs make their money on liquor and food sales, both of which can be taxed by the municipality in Massachusetts. That sounds like money, and probably quite a bit of it, to me.

As for jobs, aside from the strippers, which I spoke about above, this club will need bouncers, hosts, bartenders, waitresses, barbacks, bookkeepers, tradesmen to build the space out, advertising to draw business, etc. etc.

If someone decides that he is going to open this kind of establishment, he is going to open it somewhere, and the gentlemen of Framingham are going to find a gentlemen's club to attend. If it is in your town, a town that clearly has an active population, interested in the good of the town, then it will be well regulated. Inspections will ensure that the girls are treated properly, that there are no drugs on the premises, that prostitution is not happening there. Furthermore, the tax revenues and jobs will stay in the town.

Alternately, Framingham could block the club, force it to find another town with more lenient rules. Perhaps one with a blinder eye towards prostitution and drugs, maybe even a blind eye towards abuse of the women who are desperate enough to work there.

The phantom plagues that they imagine would become real, but they would not be in their back yard, so it would not be so bad.

I explained to my old friend that Framingham did not need a group to oppose the club, they needed a group to push for proper enforcement of laws which already exist, inspections and oversight to allow the economic benefits to occur without the blights that are so worrisome. He was a smart fellow, and he listened to me. If you live in Metrowest Massachusetts, go join his group. They are on the right track to help keep things on a properly moderate track.

Free Market Economics

Image via Wikipedia

I am a great fan of Free Market economics. It is a good idea that we might want to try one day.

What about all those politicians who are screaming about the Free Market and letting the Market work? They wouldn't know the Free Market if it leaped out of a bowl of caviar and bit them in the face.

What is the "Free Market"?
The concept of the Free Market is that commerce, unfettered by regulation, will result in fair prices due to the forces of competition among buyers and sellers.

I will illustrate this using a simple example. You decide that you want to make a little money by collecting pretty seashells at the seashore and selling them to people in town. A few other people see you doing it and start doing the same thing. You will be limited in what you can charge because you know that your competitors will undercut your prices if you get too greedy. On the other hand, your price won't go too low because if a customer offers you less that you are willing to accept, you can go to another customer who will pay you more.

This situation encourages innovation. If you start bringing a backpack to the beach so that you can carry more shells, you will be able to sell more with a lower cost of production, increasing your profits and allowing you to sell at a lower price. Eventually, everyone will get a backpack, but then you might come up with another innovation. Besides price, this is the other major benefit to the Free Market.
This is a simple example, but it is illustrative of the Free Market. You will notice that there are a few things going on there.

Requirements for a Free Market
Low Barriers to Entry - Anyone could enter the market by going down to the beach to collect shells.
Consumer Information - Consumers know what the guy next to you is charging pretty quickly.
Fair Practices - Everyone is playing fair. No one is selling fake shells, intimidating competition, etc.
Property Rights - No one can just grab your shells and take them without paying for them.
No Regulation - The government is not involved in policing this at all, either with taxes or rules.

The Government's Role in the Free Market
These four things are all pretty important for a true Free Market to exist. Ironically, the only entity that is really in a position to make sure that most of these things occur is the government. The government can create educational and investment programs to encourage people to start new businesses. The government can regulate labeling and advertising to ensure that customers get what they think they are buying. The government can prevent anti-competitive practices that drive competitors out of the market. The government can enforce contacts and provide police to prevent outright theft of goods, and the government can produce and guarantee a currency which allows commerce to occur at all.

In other words, the Free Market can only properly function with considerable government assistance. This is not a bad thing. This is what the government is for.

What is a bad thing is when the usual political tug-of-war pulls the debate right past Free Market into absurdity.

Radical Left Wing View: The government must tightly control all industries, tax profits, and protect the interests of all people, bending every business' activity into the "public good".


Radical Right Wing View: The government must remove all regulations, privatize as many government functions as possible, and let the Market take care of things.

While regulation is necessary to preserve the proper functioning of the Free Market, those on the Left sometimes have trouble leaving well enough alone. They start with the regulation that keeps things fair, but then they smell the opportunity to "improve it," but creating regulations that mandate business behavior, such as price ceilings or floors, and other regulations requiring action. For example, requiring banks to give home loans to people who are not necessarily in a position to repay them. This rarely works as it should.

In fact, it usually leads to a backlash of deregulation, as all of the unreasonable regulations are removed. It doesn't stop there. They keep going, removing many regulations that were needed to keep the system functioning properly. Without proper regulation, competition diminishes; dirty tricks are used to eliminate competitors or competitors merge to cooperate; and the public suffers.

The Fallacy of Privatization
The greatest fallacy of all in this is the idea of "privatization." Right-wingers will say that private business is more efficient than government. This is partly true. Private business is more efficient at making itself money than government. In competition, this efficiency trickles down to the public. In monopoly, it does not. When a single company is given charge of a government function, such as Amtrak, or if that company can operate without fear of losing their contract, such as Blackwater, then the company serves its own interests and not those of the public: the interests that the government was formed to serve.


I will conclude as I began, expressing my deep and abiding belief in the Free Market, and my desire that perhaps, one day in the future, we might try implementing it to solve the problems in the American economy.

Abortion: The Debate Where Both Sides Are "Pro-"

Image via Wikipedia

One of the most contentious issues of our time is about an extremely specific yet very personal issue, that of abortion. The purpose of this blog is to break down very heated issues into their rational core, and this seemed a good issue to start with.

Let us start by looking at the rhetoric of each side.
Pro-Choice: Protect a mother's right to choose how to conduct her own reproductive decisions. Unwanted pregnancies forced to go to term will lead to children who are unwanted, abused, and neglected.

Pro-Life: Protect the life of innocent unborn children. Every life is precious, and to kill a child, even one who has not yet been born, is an abominable act.

With rhetoric like that, is it any wonder that there can be no reasonable debate on this topic? Those on the pro-choice side think that their opponents are trying to take control of women's bodies away from them, to be
controlled by the government. The pro-life side thinks that their opponents are trying to kill children.

Let's break it down to just the bare bones of each side's objective.

Pro-Choice: To keep abortion legal, safe, and available to women who need it.

Pro-Life: To make abortion illegal in order to stop abortions from taking place.

Any reasonable discussion has to start with common ground, so let's consider what both sides agree on.

Common Ground

• Children are precious
• Abuse and neglect of children is undesirable
• Abortion is a terrible thing which should be avoided if at all possible
• Unwanted pregnancies are the result, not the cause, of other problems

Points of Disagreement
The point at which life begins
Most pro-life people believe that life begins at conception, while most pro-choice people believe that life begins at birth or viability (the point at which the fetus could survive outside the womb with or without medical assistance).

The cause of unwanted pregnancy
This is a much more varied opinion within both camps, but the pro-life side as a whole tends to see unwanted pregnancies as the result of a moral failure on the part of the mother while the pro-choice side tends to see unwanted pregnancies as the result of factors external to the mother such as poor education, rape, or bad luck.


I would now like to take us through an exercise that I will use extensively in this blog in the future. That is the exercise of considering what philosophical shift it would take to convert an individual from one side to the other.

The key difference between most pro-choice and pro-life people is when they believe life begins. Most pro-lifers put it at conception, and others put it at birth/viability. I suggest that if an average pro-choicer were to have it revealed to them that life began at conception, they might well change sides. Likewise, if a pro-lifer became convinced that life began at birth rather than conception, much of the wind would come out of her sails to oppose abortion. Frankly, the people on the opposite sides of this issue are not that different.

Regarding viability, that is also a very slippery topic. In the foreseeable future, we will have uterine replicator technology, meaning that an embryo could be placed in a machine which would gestate it until "birth". On the other hand, a 3 month old infant is almost completely helpless, completely unable to find food or conduct any other basic life functions without assistance. So, what really is the point of viability?

Law vs. Reality
Most of the debate over abortion is what the laws should be on it. As we know, making something illegal ends it completely. That is why no one travels faster than the speed limit, the drug market has completely vanished, and domestic violence is unheard of in America. The law has an effect, but not always the one that is intended.

When a woman decides that she needs an abortion, she will find a way to get one, regardless of what the law says. A ban would certainly prevent many abortions, but those who are desperate would do whatever they needed to, including risky back-alley procedures or dangerous drug combinations to end their pregnancy.

On the other hand, a great deal can be done to reduce the number of abortions that women get without using the law to make it more difficult. Abortion is a terrible and traumatic choice for anyone who faces it. Taking steps to reduce unwanted pregnancy through effective education would make a difference. These programs must include both making good decisions about when and with whom to have sex as well as reliable, accurate information on how to have sex more safely. Improving the adoption system and giving women better education about it would also encourage more women to take unwanted pregnancies to term.

The law, whether around abortion, drugs, or motor vehicles, is a blunt and imprecise instrument. When considering public policies to achieve a desired end, simply passing a law is rarely the correct solution. Instead, we must carefully consider the problem, its root causes, and the solutions which will alter the causes, not just the effects.

The Radical Moderate

Thank you for taking the time to read my new blog. As most people reading this are likely aware, I write another blog called People I Meet which is more about business and all the interesting people and possibilities that exist in the world. I decided to start the Radical Moderate blog because I felt that I had something to add that was missing in the public discourse. In saying so, I have demonstrated my megalomania and have now shown my credentials to be a political blogger.

I came up with the term "Radical Moderate" many years ago to describe my political beliefs. Many conservatives think I am a liberal, and many liberals think I am a conservative. This is the result of my habit of looking deeply at the philosophical underpinnings of political debates and finding that each side is about half right, thus making them entirely wrong. (Math is different in politics.)

The problem is that the public debate occurs in sound-bites. Positions have to be quick and catchy. "Drugs kill children", "Obamacare will bankrupt America", "Tax the rich", "A woman's right to choose." Quick, snappy, non-specific, and deceptive.

In this blog, I will look at contentious issues and explore the philosophical underpinnings. My goal is not to convince you to agree with me. Rather, I seek to help you to understand that those on the other side of the issue from you are not necessarily baby-eating, America-hating terrorists, but that they are people who, like you, love America, care about children, families, liberty, fairness, justice, and all the other things that we hold dear as Americans.

Posts will be inspired mostly by things I encounter in the media, but I am happy to discuss any topic which you would like to see a radical moderate treatment for, so do not hesitate to contact me with questions, comments, or objections to my commentary.