Health care reform

It is clear that health care costs significantly more in the United States than in other countries. What should be done about this is, to state it mildly, a matter of some debate. Our health care system is one which I suspect few people fully understand. I do not pretend to be one of those few. Like most, I must base my opinions on facts provided by others. Among the best reports I've seen on the issue of US health care costs is this one, by McKinsey & Company.

This report compares the cost of health care in the United States to that of other developed and industrialized countries. The writers give an excellent breakdown of where the largest cost differences come from. From that, we can better determine how to correct any issues with our present system and lower health care costs for everyone. Given that the McKinsey report estimates that we as a nation spend $477 billion more on health care than other comparable countries, or $1645 for each person in the country, this seems to be a worthy goal.

Unfortunately, there is no magic bullet. The cost difference does not come from any one source, and no one change is going to solve all the problems we face. The health care system is not broken beyond hope of repair, but system-wide changes are required to bring down costs. However, this report makes it clear that there is no need to move towards a fully socialized system, as some advocate. There may not even be a need to move towards President Obama's approach of government competition in the private sector. I believe that with a few relatively simple changes, we can make a significant reduction in health care costs in the United States, without any significant taxpayer expenditure. I will focus on four specific areas.

1) Physicians are in many cases paid per procedure performed, per referral, or per patient seen. The phrase "quantity care, not quality care" has been thrown about lately in reference to this practice. This pay structure inevitably creates a conflict of interest for the doctor. Doctors are forced to choose between providing the best possible care for the patient and making the most possible money.

I am in principle a libertarian, meaning I believe in minimal government regulation. But I am also an engineer, and I understand the importance of an inviolable ethical code. Professions that put lives at stake every day must always focus on the end goal of keeping people safe, regardless of financial or social pressures. For doctors, conflicts of interest like this are absolutely not acceptable, under any circumstances. Otherwise the entire medical profession risks losing the trust which it has built.

The AMA should require that doctors' be paid on a salaried or hourly basis, and refuse to work under any other pay system. Should the AMA fail to pass such a resolution, individual states should step in and demand that their doctors be paid in accordance with their ethical obligations. The interference of the federal government should be a last resort in this matter, but it should be considered as a possibility should other means fail.

2) A related problem is co-ownership of outpatient facilities by physicians. Studies have shown that physicians who own their own imaging equipment are between two and eight times more likely to recommend tests than those that do not own such equipment. This is another conflict of interest situation, where doctors are placed in a position where they may benefit from things which harm their patient. Doctors are ethically required to avoid such situations. Again, the AMA, states, or the federal government should forbid any such arrangements.

3) Prescription drugs in the United States cost significantly more than their equivalents in other countries. Market forces have no effect on price, because while drugs are protected under patent, the pharmaceutical company who developed the drug has a legal monopoly on its distribution and can charge whatever they want. This needs to change. More limited patent protections would allow the market to lower drug prices, while still protecting some measure of exclusive profit for the developers of new drugs.

Patent protections for prescription drugs need to have shorter terms, incentives for licensing the drug to competitors, and more difficulty re-patenting what is effectively the same drug. It should also be made easier for consumers to obtain prescription drugs from outside the United States, so that the market force of lower drug prices elsewhere can be brought to bear lowering drug prices here at home.

4) Malpractice concerns drive up health care costs in a number of ways. Most obvious is malpractice insurance, which due to high premiums costs over $20 billion a year, or nearly $30,000 per doctor. These costs could be greatly reduced by tort reform, which would alter the situations under which a patient may sue their doctor. Costs would be reduced even more, because of the subsequent reduction in defensive medicine.

There should be a statute of limitations on bringing malpractice suits, forbidding suits more than a few years after an alleged mistake was discovered. There should be limits on non-economic damages, preventing destructively large awards for non-quantifiable losses like pain and suffering. The idea of setting up a system of specialized health courts to hear malpractice cases should be explored. Doctors should not be immune to the consequences of their mistakes, but the cost of doctors' protecting themselves is passed on to all of us, and needs to be reduced.

I am by no means an expert, and I am not claiming that this plan fixes all our health care problems. But my estimate is that these changes could lead to over $200 billion in savings, about $700 per person. And with the exception of health courts, none of these ideas cost a dime in tax money, or require expansion of government power. There would be significant upset in the health care sector until adjustments could be made, but this would be temporary, and the long term benefits would vastly outweigh the temporary costs.

Administration costs are much higher in the US than in comparable countries, and make up a significant fraction of our remaining health care cost overage. I plan to address possible ways of lowering these costs in a later post. Some argue that a single-payer socialized system would lower overhead costs in the US, but this is very questionable. The United States government is not known for small and efficient bureaucracies, and a medical bureaucracy would be no different. Other possibilities must be considered. And there is still the question of health care for the uninsured, which I will also leave for a future post.

There is no need for a socialized medical system in our country if we want to lower costs. For that goal, there is no need for any taxpayer money to be spent at all. We can have reforms that will lead to massive cost reductions. All that's needed is for us to elect representatives willing to take the necessary steps.

You can do it; but do they want you to?

Before I go on, let me be clear: I hate cigarette smoke. It makes me and my family sick almost instantly. Smoke from our neighbors has driven us from our home on multiple occasions. As far as I am concerned, the only legitimate place for smoking is far, far away from anyone who could possibly object.

But I do not hate smokers. I recognize the right of smokers to smoke if that is their choice, so long as they do not inflict the same poison on anyone who does not consent. I also recognize the difficulty of quitting. I do not believe that anyone truly can't quit, but I do acknowledge that for some the battle will be more difficult than they are willing to endure without help.

Cigarettes have long been taxed in the United States. Those taxes are argued to be justified because of the extra burden smoking places on the health care system. However, a counter-argument is that, seeing as the US government does nothing to help smokers quit, the government is effectively feeding off the addictions of its citizens. I find this argument reasonably convincing. If the government was truly concerned about the societal cost of the health effects of smoking, it would make sense for cigarette taxes to go towards smoking cessation programs, which they do not.

I am not convinced it is the role of the federal government to tax cigarettes for any purpose, or to subsidize any industry. However, as long as it seems determined to do both, I propose the following: the next time cigarette taxes are raised, the new money should go directly toward subsidizing smoking cessation aids. Most particularly, electronic cigarettes should be approved by the FDA and encouraged as an effective cigarette replacement. The detrimental health effects of nicotine are not insignificant, but they are obviously vastly preferable to the effects of cigarettes both on the smoker and their surroundings. Obstruction of their approval is unjustifiable in an environment where cigarettes, which by design provide the same level of nicotine, are readily available.

I do not mean this proposal to encourage government interference. Instead, I intend this proposal to expose government hypocrisy. If our elected officials truly raise cigarette taxes to mitigate the health care costs of smoking, then the best possible use for that money would be to help people stop smoking entirely, thereby eliminating those costs forever. However, if cigarette taxes are raised only because smokers are an easy target for taxation to help feed our representatives' spending addiction, this proposal will be defeated.

If that happens, and I suspect it will, we will have proof that the government doesn't want people to stop smoking, because that would cost them tax revenue, and that was all they were ever interested in to begin with. Our government will have become the same as companies that sell cigarettes, living off the slow deaths of its own people.

Unjust punishment

Jammie Thomas is a single mother of four, and her financial future has just been destroyed. A jury has found her liable for nearly two million dollars of damages. That is, in all likelihood, more money than she would earn in her entire lifetime. What could this woman possibly have done to someone to cause them so much harm that she can never repay it, no matter what she does? Did she embezzle funds? Did she negligently cause a car accident, severely injuring others? Did she accidentally set fire to a small apartment complex?

No. She downloaded twenty-four songs.

The retrial of Capitol v. Thomas came to a conclusion this week. The jury awarded Capitol Records $1,920,000 in damages. That is $80,000 in damages for each song. She did not sell copies, or purposefully share them with others. Two million dollars, for downloading twenty four-songs.

Copyright infringement is a crime, and should remain so. Violators of copyright should be punished. But punishment must be proportional to the crime, or the punishment is unjust. It is reasonable to make someone pay for the copy they made without consent of the rightsholder. A copy of each of these songs would cost $1 or less. It is reasonable to make someone pay additional fines, both as punishment for breaking the law and to act as a deterrent. $10 per download would be easily sufficient to make someone think twice.

I could see a $250 fine for what this woman did. Maybe even a $500 fine. But $80,000 per song? She'll never be able to pay that. Everyone involved knows it. Thomas will have no choice but to declare bankruptcy. This judgment is the financial equivalent of executing someone for shoplifting two CDs. And this is not the only case, by far. Tens of thousands of suits like this have been brought, some against people who don't even own a computer. Many settle just to avoid the legal fees, without ever having any charges against them proved.

This is not justice. This is not legitimate punishment for a crime. It's not even an attempt to recover potential profits that are argued to have been lost. The laws that make this possible, and the corporations prosecuting these cases, have one goal in mind: to make you afraid.

Once you know that things like this are going on, you have two choices: you can stand back and let these corporations and the laws they have bought ruin the lives of thousands more people, or you can fight back. Don't vote for anyone who doesn't take a stand, to oppose the laws that allow unjust punishments like this to take place. Tell your friends. Enough lives have been destroyed. It has to stop.

The most powerful force in creation

Legend has it that someone once asked Einstein what the most powerful force in the universe was, and his answer was "compound interest". He'd be right. If you can get interest working for you, you can make money without ever having to do anything at all. For banks, that means making loans. For people like you and me, that means putting our money in a savings account or CD.

When it comes to compound interest, there's a rule of thumb that can show you just how powerful it really is. It's called the rule of 72: if you multiply the interest rate by how long it takes your money to double, the product is 72. At 1% interest, you'll have twice the money you started with in 72 years. At 4% interest, it would take only a fourth of that time, or 18 years. At 7%, which some of you probably have mortgages at, it would take only ten years to double. Every ten years after that, it would double again. If you could save money at 7% for 50 years, you would end up having 32 times the money you started with, having done nothing at all!

The problem comes when interest works in the other direction. If compound interest is working against you, because you've borrowed money, you will end up paying much more than you borrowed. Take a look at this mortgage calculator. The default mortgage it pulls up for me is on a $165,000 house, over 30 years, at 7% interest. That's a payment of about $1,100 a month, for 360 months. To get the $165,000 you want today, you'd end up paying the lender almost $400,000 over the next 30 years! The question you have to ask yourself is, is it worth all that money in the future to have this extra money today that I haven't earned yet?

Our governments almost always answer, "yes". Instead of either raising taxes or cutting spending to balance the budget, they take out loans in the form of bonds. From that point on, we taxpayers are on the hook for the loans our elected representatives took out in our name. We are now paying over $450 billion dollars a year in interest on the federal debt. Do you realize what that means? Until the latest round of "stimulus", that was almost enough to cover the entire federal budget deficit every year, including the Iraq and Afghanistan wars! The deficit was caused almost entirely by the interest on previous years' deficits! The budget being so far out of balance now is in large part a consequence of the budget being much less out of balance decades ago, and our representatives taking out loans to cover the difference.

In a common news topic, California is in a similar situation. According to their proposed budget, the state of California is paying nearly $5 billion dollars a year in interest payments. In their case, of course, that is only a quarter of their projected budget shortfall. California has other issues, including the same overpromising on retirement benefits that contributed to the failure of GM, and which will soon devastate the federal budget as well if not fixed. But it's unquestionable that if the state government had closed their budget gap years ago by more responsible means, the problems they face now would be much easier to manage.

So how can such an egregious thing happen? Well, it's simple, really. When faced with budget shortfalls, elected representatives have three basic options: raise taxes, cut spending, or send the people into debt. Raising taxes and cutting spending will both hurt their political popularity. Going into debt won't. They choose the option that hurts their own interests the least, instead of choosing the option that is right for their constituents. Because of that failure of judgment, you and I and our grandchildren will be forever paying taxes to cover government outlays that either should have been paid for generations ago, or should never have been made at all.

You, and your children, have been sold into debt slavery by your own employees. And it's getting worse every day we allow it to go on.

There is only one way to stop this. Make sending us into debt hurt them more than raising taxes or cutting spending hurts them. Don't vote for anyone who isn't absolutely committed to sane budgetary policies. Don't let your friends. This has to stop, or we are all going to drive right over a cliff.

Experience doing what?

One of the issues that's been brought up in my campaign more than once is my level experience. The same question comes up with almost any independent candidate. People ask, "How can someone with practically no governing experience possibly do as good a job as someone with more experience?"

I respond by asking: why do you assume experience to be a necessary thing, or even a good thing? Look at Congress's approval ratings. It is unquestionable that most of the American people, including myself, think Congress is doing a horrible job.

Do you realize how much experience this terrible, ineffective Congress has? The 435 voting Representatives and 100 Senators presently in office have served for over six THOUSAND man-years. That's an average of twelve years each in the US Congress, to say nothing about what each person was doing before that!

Yes, other candidates have more experience than I do. It would be hard for them not to. But look at the level of service we get out of our present, very experienced Congress. Does that experience really make them do a better job? Or does the fact that they have spent so much time in DC prevent them from doing their real job of representing the people who elected them?

A candidate who lacks experience but can learn quickly is infinitely preferable to a candidate who has a great deal of experience doing a bad job.

Breaking the bank

I tend to try to minimize government interference in the market. I believe that a free market is best for all involved. However, I believe that the government must interfere in some circumstances to maintain a free market. A hundred years ago, anti-trust laws were passed to combat monopolies, who could use their overwhelming market share to defeat market forces and set prices as they pleased. Today we face a different but similar concern: corporations so large that their failure would result in the failure of the entire economy. Such companies wield disproportional power. Their well-being becomes the primary concern of the government, because it is perceived that what is good for Wall Street must be good for the country.

It is clear from the crisis we now face that this is not the case. The government has shaped policy for the benefit of Wall Street for decades, and now we all find ourselves facing the result. Financial institutions have been allowed to focus so much on potential profit that they ignored their obligation to limit the risk to their investors; those institutions are now are failing everywhere, costing taxpayers of today and tomorrow billions just to keep them from total collapse.

We must learn two things from this:

1. What is good for Wall Street is not necessarily what is good for the country.
2. Too big to fail is too big to exist.

Continual bailouts will solve nothing. Only a fundamental restructuring of the entire financial sector will return our economy to sound footing. The US government should cease handing out money to banks without stipulations; this benefits Wall Street, but does nothing for America. Instead, the government should take an approach to banks similar to that taken with GM: demand that the bankers to show that they have a clear plan to return to normal operation before receiving more taxpayer money; or cut the bailouts, forcing the banks into the FDIC equivalent of bankruptcy protection for restructuring, just like any other failing company.

Restructuring would allow the sickest parts of the financial organizations to die, while the healthy parts would quickly return to normal operation with clear credit. The financial underpinnings of the banking system would once again be sound, and lending would resume. Any other course of action is an irresponsible use of taxpayer money. Breaking up the megabanks into smaller entities would then prevent large financial corporations from ever holding such power over the US economy and US policy again. We should never again hear that any single company is "too large to fail".

No one else is saying this because Wall Street doesn't want you to hear it. The financial princes want you to keep believing that they know what is best for the economy, when this crisis is clear and inarguable proof that all they truly know is what is best for themselves. Wall Street has been lying to you, and they're going to continue to lie to you in order to get what they want: a continued stranglehold on the government and economy of this country. Elect me, and I will do everything in my power to break that hold.

Fixing the deficit

The US government is presently running a trillion dollar deficit. The federal government is cutting a few things here and there to reduce this somewhat. This is arguably a good thing. But look at this chart:
65% of the budget is military, medicare and social security. Another 8% is interest on the debt, with 10% on "other mandatory spending", which is more entitlements. Even if all the non-military discretionary spending was cut, including the departments of education, energy, the interior, state, if we eliminated everything else the federal government does besides entitlements and the military, it would still only account for half the deficit. And the baby boomers are going to be hitting retirement age in the next three years, making social security and medicare costs get even larger. Cuts to bad programs are always a good thing. But in this case there is no way they can ever be enough.

Tax receipts will not grow with a growing economy, because we don't have one, and from a perspective of jobs we're probably not going to have one in the next year or two. Unless something dramatic can be done to drastically improve the economy, there are only three ways out of this budgetary mess we're in: cut entitlement spending, cut military spending, or raise taxes. This is not debatable; there's no way around it, and anyone who tells you there's another option is either lying to you, or just uninformed. This problem must be addressed. We have to choose, and we have to choose now. Nobody else is going to tell you this, because they're afraid to. But someone has to, so I am.

Are we going to have federal programs to take care of the elderly and poor? Are we going to have a strong military? Are we going to have the low taxes we have now? Because we can not have all three. We can't have things without paying for them some day, and soon we won't be able to delay that day any further. What are our priorities as a nation?

From a pragmatic perspective, of course, the best solution would involve making the economy better. There are ways to do that, which I'll address in other comments. If we wanted to balance the budget today, though, we would have to find some combination of tax increases and spending cuts, because picking just one of the three options isn't going to fly. Where exactly that compromise lies is not the issue of today. My priority is ensuring that this country has a future, and the only way to do that is to address the growing problem of government debt instead of ignoring it. If that matters to you, tell your friends to vote for me.

Donations

As you have probably noticed, the site is now set up to accept donations through Paypal and Google Checkout. Those of you who donate, thank you for your support. I've been a little busy lately, but an up-to-date listing of all donations I receive will be set up in the next week or two.

Welcome

I decided it was time to add a place where I could start pointing out updates to the site, and add comments that didn't quite belong elsewhere. Thus this blog! I hope this will help facilitate discussion and communication about my campaign and platform. Feel free to comment on anything I say here, dissenting views are welcome. Nothing will be removed except for cause of abuse or profanity.