Kevin Drum

Health Insurance Hell

| Mon Aug. 3, 2009 10:34 AM PDT

The big fault line in the healthcare debate right now is over the "public option" — a proposal that people should have the option of getting healthcare coverage from either a private insurance carrier or from a government program.  Conservatives are worried that this would put too much pressure on private insurers, but Michael Hiltzik asks the obvious question: who cares?

The firms take billions of dollars out of the U.S. healthcare wallet as profits, while imposing enormous administrative costs on doctors, hospitals, employers and patients. They've introduced complexity into the system at every level. Your doctor has to fight them to get approval for the treatment he or she thinks is best for you. Your hospital has to fight them for approval for every day you're laid up. Then they have to fight them to get their bills paid, and you do too.

....Why do we tolerate this? The industry loves to promote surveys indicating that most Americans are "satisfied" with their current health insurance — 37% are "very satisfied" and 17% "extremely satisfied," according to one such study.

Yet these figures are misleading. Most people are satisfied with their current insurance because most people never have a complex encounter with the health insurance bureaucracy. Medical care generally follows the so-called 80-20 statistical pattern — 20% of patients consume 80% of care. If your typical encounter is an annual checkup or treatment of the kids' sniffles, or even a serious but routine condition such as a heart attack, your experience is probably satisfactory.

But it's on the margins where the challenges exist. Anyone whose condition is even slightly out of the ordinary knows the sinking feeling of entering health insurance hell — pre-authorizations, denials, appeals, and days, weeks, even months wasted waiting for resolution.

Sounds great to me!  Why would anyone want to change this system?

Health insurance is a weird industry.  Healthcare itself is provided by doctors, nurses, hospitals, pharmaceutical companies, hospices, and device makers.  Insurance companies do none of this.  They don't do research, they don't perform surgeries, they don't change bedpans, and they don't make diagnoses.  They're just middlemen.  All they do is pay the bills after marking them up 30%.  They don't do anything at all to make healthcare better or more efficient.

But for some reason we're supposed to care about whether they continue to exist or not.  Why?  I care about the quality of my doctors, my nurses, the hospital I go to, and the drugs I take.  I don't really care who takes on the administrative task of paying the bills — except that I wish they were handled a lot more efficiently and with a lot less hassle than private insurers typically do.  Frankly, a world without private healthcare insurers sounds pretty good to me.

And as long as we're reading the LA Times, they've got a nice piece by Michael Rachlis, a doctor in Toronto, about the Canadian healthcare system.  Guess what?  It's pretty good!  It's not the system I'd choose — in particular, I think public funding should provide a basic level of healthcare but patients should always have the right to pay more for better care if they want to — but it works as well or better than ours for a fraction of the cost.  Read the whole thing for more.

Advertise on MotherJones.com

Public Diplomacy Takes Center Stage

| Mon Aug. 3, 2009 9:47 AM PDT

The New York Times reports that the communicator-in-chief plans to take his show on the road:

In coming weeks, senior administration officials said, the White House will begin a public-relations campaign in Israel and Arab countries to better explain Mr. Obama’s plans for a comprehensive peace agreement involving Israel, the Palestinians and the Arab world.

The campaign, which will include interviews with Mr. Obama on Israeli and Arab television, amounts to a reframing of a policy that people inside and outside the administration say has become overly defined by the American pressure on Israel to halt settlement construction on the West Bank.

If Obama's pressure on Israel to halt new construction in West Bank settlements was Phase 1 of his Mideast game plan, Marc Lynch says we're now moving on to Phase 2:

This, I suspect, is something very different: a strategic communications campaign designed to build support for a push towards a two-state solution among key Israeli, Palestinian, and Arab constituencies.  Reassurance, yes, but within the context of explaining the  American view of the urgency of the moment for a push towards peace — and of building support for, and even a demand for, such a push towards peace among those publics.  There are many tools which could be deployed in such a campaign — not just the television interviews mentioned in the article, but the whole portfolio of campaign outreach tools, including new media, which could be deployed in support of such a strategic objective.

Along with practically everyone else on the planet, I've been extremely non-optimistic for the past decade about the chances for some kind of Israeli-Palestinian accord.  And Obama or no Obama, I can't say that anything recently has changed my mind.  It still seems politically impossible for Israel to take any serious action on the settlements, just as it seems unrealistic to expect that Fatah and Hamas can come to any kind of agreement that allows them to effectively represent Palestinian interests.  There are distinct limits to what Obama's oratory can do, and this seems like one of them.  But I'm glad he's at least trying.

Follow the Money

| Mon Aug. 3, 2009 9:04 AM PDT

Clean-energy companies have increased their K Street spending by 5x over the past couple of years.  But Bloomberg reports it's still a drop in the ocean:

Exxon Mobil Corp., the biggest U.S. oil producer, spent more on Washington lobbying during the first half of the year than all clean-energy companies combined, researcher New Energy Finance Ltd. said.

Exxon Mobil, based in Irving, Texas, spent $14.9 million lobbying in the six months, 23 percent more than the $12.1 million laid out by companies that make solar panels or wind turbines to generate electricity, London-based New Energy Finance said today in a note to clients.

The entire oil and gas industry spent $82.2 million in the first half of the year.  If you're ever wondering why the Waxman-Markey climate bill kept getting watered down so much, now you know.

The Economics of Social Destruction

| Sun Aug. 2, 2009 9:56 PM PDT

As he so often does, Paul Krugman gets to the heart of what's wrong with the financial industry these days:

Even before the crisis and the bailouts, many financial-industry high-fliers made fortunes through activities that were worthless if not destructive from a social point of view.

[Recent examples include high-frequency trading and Andrew Hall's multi-billion dollar oil speculation.]

Just to be clear: financial speculation can serve a useful purpose. It’s good, for example, that futures markets provide an incentive to stockpile heating oil before the weather gets cold and stockpile gasoline ahead of the summer driving season.

But speculation based on information not available to the public at large is a very different matter. As the U.C.L.A. economist Jack Hirshleifer showed back in 1971, such speculation often combines “private profitability” with “social uselessness.”....As the great Stanford economist Kenneth Arrow put it in 1973, speculation based on private information imposes a “double social loss”: it uses up resources and undermines markets.

Now, you might be tempted to dismiss destructive speculation as a minor issue — and 30 years ago you would have been right. Since then, however, high finance — securities and commodity trading, as opposed to run-of-the-mill banking — has become a vastly more important part of our economy, increasing its share of G.D.P. by a factor of six. And soaring incomes in the financial industry have played a large role in sharply rising income inequality.

So what's to be done?  Krugman ran out of room before he could make any suggestions other than taxing high incomes, and I'm not sure that's really all that useful anyway.  There's a more basic problem here that has to do with financial transparency, the rise of derivatives, widespread abuse of leverage, and the basic profitability of the financial sector.  It's getting late and I don't feel like speculating on that right now, but one way or another, that's where we ought to apply our energies.

Tomato Woes

| Sun Aug. 2, 2009 8:42 PM PDT

A couple of months ago we bought one of those upside-down tomato planters you might have seen advertised on TV.  I like it.  It hangs right outside my window, so I get to watch it grow every day.

And it's done well.  At least, we thought it was doing well until the first tomatoes ripened and we took a look at them.  The top halves are all fine, but the bottoms all look like the ones in the picture: convered with a gray, pulpy mass and basically ruined.  I'm not sure what causes this kind of thing.  Is it a bug?  A parasite?  Overwatering?  An alien nanobot infestation?  Something else?

I desperately need advice.  Are there any expert tomato farmers out there who can tell me what's going on?

....Are Condemned to Repeat It

| Sun Aug. 2, 2009 8:34 PM PDT

Responding to a John Quiggin post lamenting the fact that the financial disasters of the late 90s produced no real regulatory action, Matt Yglesias says:

Whatever you think of Greenspan’s overall legacy [...] I think it’s a bit hard to regret that he acted swiftly and decisively to keep the world out of a major recession at the turn of the millennium....Letting things fall apart would have led to millions of additional unemployed people, state budget crises, cutbacks in critical social services, etc., etc., etc.

But it really does seem that the success of these operations was taken as a reason to avoid any serious systematic reform. And you can feel the same kind of thing happening today. It’s disturbing.

You can say that again.  Part of the reason for this might be the fact that even now, with wild figures being routinely thrown around about the size of the bailout ($17 trillion! $23 trillion! 3 years of GDP!), most people still don't truly understand the size and scope of the government action that was required to keep the private sector from melting down completely.  And the reason is pretty simple: the vast, vast majority of it was done behind the scenes by the Fed.  TARP and the stimulus bill were the only parts that really got any public scrutiny.  All the rest was done without congressional debate via an alphabet soup of loan guarantees, term facilities, interest rate reductions, conservatorships, currency swaps, commercial paper backstops, interest on reserve balances, liquidity pumps, collateral forbearance, asset stop-loss guarantees, and more.  This stuff is never going to add up to the astronomical sums people have been tossing out, but it's still a huge amount of money.  And without it, the entire financial industry would have collapsed.

But in the event, the Fed did do all this stuff, and the result is that what most people see is a bad recession but nothing more.  Just part of the business cycle, thankyouverymuch, and like other recessions it will end soon and life will go on.  And needless to say, the financial industry will be lobbying its ass off to make sure that Congress is inclined to see things the same way.  Disturbing indeed.

Advertise on MotherJones.com

Friday Cat Blogging - 31 July 2009

| Fri Jul. 31, 2009 12:06 PM PDT

I iz confused.  A couple of weeks ago I decided to take another crack at setting out limited portions of cat food in order to slim down my critters a bit.  However, after a few days of this, a bit of googling persuaded me that I might have gone too far.  I was underfeeding them, which is potentially dangerous, and in any case not what I had in mind.

So I decided to apply some Science™ to the problem.  Step 1: go back to free feeding them, which has produced their present rotund condition, and see how much they hoover up.  Answer: over the course of five days they ate 24 ounces of dry food and five cans of wet food.  Converting from metric (because the boffins at Hill's list calories per kilogram on the side of their bag), that comes to 2,000 calories of dry food and 400 calories of wet food.  That's 480 calories per day, or 240 calories per cat.

No problem, then.  If I want to shrink them by 20% or so, just cut that down to about 200 calories.

But here's where I'm confused.  As it happens, this matches up perfectly with the recommendation printed on the dry food bag, which suggests that a 15-pound cat needs about 200 calories per day.  But if you google the subject of how much to feed your cat, virtually every source suggests 20-30 calories per pound.  In other words 300-400 calories for a 15-pound cat.

This is ridiculous.  These recommendations aren't even close.  However, since both Science™ and the dry food instructions converge on approximately the same answer, I'm going with 200 calories for now.  The internet appears — shockingly, I know — to be wildly misinformed.

Or something.  Anyway, here are today's Before pictures.  On the left, Domino and Inkblot are lying around in close proximity.  Why?  Because the carpet had just been cleaned and their sensitive little paws didn't like the slight dampness.  So they decamped to the foyer.  On the right, the carpet's all dry!  Inkblot obviously approves.

Did the Stimulus Work?

| Fri Jul. 31, 2009 10:52 AM PDT

Josh Bivens of EPI digs into today's second quarter GDP report to try and figure out what effect the stimulus package has had:

Federal government spending grew at an 11% rate in the quarter, adding roughly 0.8% to overall GDP. State and local government spending grew at a 2.4% annual rate, the fastest growth since the middle of 2007. It is clear that the large amount of state aid contained in the ARRA made this growth possible.

Furthermore, real (inflation-adjusted) disposable personal income rose by 3.2% in the quarter, after rising by only 1% in the previous quarter. A large contribution to this increase was made by the Making Work Pay tax credit passed in conjunction with the ARRA.

....The consensus of macroeconomic forecasters is that ARRA contributed roughly 3% to annualized growth rates in the second quarter. This means that absent its effects, economic performance would have resembled that of the previous three quarters, when the economy contracted at an average annual rate of 4.9%.

The argument that the stimulus bill has "failed" because times are still tough has always been dimwitted.  There was never any chance that it was going to miraculously end the recession, only that it might make it a little shallower than it otherwise would have been.  So far, it appears to have done exactly that.

But Can It Write Blog Posts For Me?

| Fri Jul. 31, 2009 9:43 AM PDT

This is, I admit, pretty cool.  It's almost the dictionary definition of a massive abuse of technology, but pretty cool anyway.  If they could make it work for telephone interviews, I might even get one.

Actually, as things stand now, I can't record telephone interviews at all.  A few years ago, for no reason I've ever been able to figure out, my phone line suddenly developed a loud hum.  You can't hear it during an ordinary conversation, though, only when you plug a tape recorder directly into the line or into the Mic jack on the phone.  I've tried a million different combinations to try to figure out what's causing this, but no dice.  The hum is always there, and it's loud enough to drown out actual conversation.  Very annoying.

Take Back the Beep

| Fri Jul. 31, 2009 9:17 AM PDT

Gabbing about Medicare reimbursements rates is all well and good, but on a purely personal level this is the kind of stuff I really love.  It's from David Pogue:

Over the past week, in The New York Times and on my blog, I’ve been ranting about one particularly blatant money-grab by American cellphone carriers: the mandatory 15-second voicemail instructions.

Suppose you call my cell to leave me a message. First you hear my own voice: “Hi, it’s David Pogue. Leave a message, and I’ll get back to you” — and THEN you hear a 15-second canned carrier message.

....In 2007, I spoke at an international cellular conference in Italy. The big buzzword was ARPU — Average Revenue Per User. The seminars all had titles like, “Maximizing ARPU In a Digital Age.” And yes, several attendees (cell executives) admitted to me, point-blank, that the voicemail instructions exist primarily to make you use up airtime, thereby maximizing ARPU.

Right now, the carriers continue to enjoy their billion-dollar scam only because we’re not organized enough to do anything about it. But it doesn’t have to be this way. You don’t have to sit there, waiting to leave your message, listening to a speech recorded by a third-grade teacher on Ambien.

Apparently Pogue's campaign to end this ripoff, which he calls "Take Back the Beep," is already having an effect.  It just goes to show that the mainstream media isn't dead yet.  Now if only we can get Lou Dobbs hot and bothered about this.