Just a geek who lives in Olympia, WA with my wife, son, and animals, writing fiction that he hopes will make the world a better place someday.
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The Wrong Healthcare Issue

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Right now, the House Republicans are fighting to get enough votes to pass their bill to repeal and replace the Affordable Care Act, aka “Obamacare.” The Democrats are staunchly opposed. Both sides are arguing over the affordability of healthcare and access to healthcare insurance.

As far as I can see, they’re both circling around wrong tree, chasing each other’s tails. Insurance is only a symptom of the greater problem, and trying to deal with symptoms is not only expensive, but will also postpone dealing with the real problem, which continues to worsen. That problem? Healthcare costs. People need insurance because healthcare costs in the U.S. are effectively the highest in the world, and the vast majority of Americans don’t get as good healthcare as nations spending far less on healthcare.

In 2015, U.S. health care costs were $3.2 trillion, making healthcare one of the largest U.S. industries, nearly eighteen percent of Gross Domestic Product, but fifty-five years ago, healthcare only comprised five percent of GDP.

Part of the reason for the cost increase is emergency room treatment, the most expensive single aspect of current healthcare, making up one-third of all health care costs in America. And a significant proportion of emergency room care occurs because people can’t get or afford other treatment for various reasons.

Another component of rising costs is the continuing increase in the costs of drugs and medical devices. According to Forbes, the healthcare technology industry was the most profitable U.S. industry sector of all in 2015, notching an average profit margin of 21%, with the most profitable company of all being Gilead Sciences with a 53% profit margin. And no wonder, given that the list price for the top-20-selling drugs in the U.S. averages more than twice as much as those drugs as in the E.U. or Canada.

While the pharmaceutical industry pleads high research and development costs, a GlobalData study showed that the ten largest pharmaceutical companies in the world in 2013 spent a total of $86.9 billion on sales and marketing, as opposed to $35.5 billion on research and development, almost two and a half times as much on marketing as R&D. Those ten companies had an average profit margin of 19.4%, ranging individually from 10% to 43%, with half making 20% or more. And since Medicare is prohibited by law from negotiating drug prices for its 55 million beneficiaries, the program must pay whatever price drug makers set.

The U.S. medical technology market exceeds $150 billion a year in sales, and in 2015 the gross profit margin for the medical equipment and supplies industry averaged 12.1%, according to data from CSImarket.com.

Studies of doctors’ compensation show that over the past twenty years, that, in general, physician compensation has increased far less than all other components of healthcare. In fact, annual earnings actually declined for the typical physician between 2000 and 2010. Annual earnings for physician assistants and pharmacists have increased at a greater rate. More to the point, as a percentage of total national healthcare costs, U.S. physician wages are small – approximately 9% – a number among the lowest in the developed world.

Hospitals’ costs have increased significantly, but not because they’re making money. A Health Affairs study analyzed hospital income and costs of more than 3,000 hospitals nation-wide and found that fifty-five percent of hospitals lost money on each patient they served in 2013. This does raise the question of whether non-profit hospitals are paying more and more, possibly too much, for high-priced administrators apparently required by the bureaucratic and legal maze generated by the interweaving of private and public medical systems, government regulations, and insurance company requirements. Studies indicate that administrative costs make up twenty to thirty percent of the United States health care bill, far higher than in any other country. American insurers, meanwhile, spent $606 per person on administrative costs, more than twice as much as in any other developed country and more than three times as much as many, according to a study by the Commonwealth Fund.

Then add to that the skyrocketing costs of malpractice insurance and often excessive court judgments in medical tort claims cases.While the amount is subject to dispute, it’s not inconsiderable and also adds to costs.

Unfortunately, neither the Affordable Care Act nor any proposed Republican replacement will do anything to deal with what I’ve mentioned, and what I’ve mentioned are only the most obvious causes of ever-increasing health care costs.

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All Together Now

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This is how to stop demagogues and extremists: rebuild community.

By George Monbiot, published in the Guardian 8th February 2017

Without community, politics is dead. But communities have been scattered like dust in the wind. At work, at home, both practically and imaginatively, we are atomised.

Politics, as a result, is experienced by many people as an external force, dull and irrelevant at best, oppressive and frightening at worst. It is handed down from above rather than developed from below. There are exceptions – the Sanders and Corbyn campaigns for example – but even they seemed shallowly rooted by comparison to the deep foundations of solidarity that movements grew from in the past, and may disperse as quickly as they gather.

It is in the powder of shattered communities that anti-politics swirls, raising towering dust devils of demagoguery and extremism. These tornadoes threaten to tear down whatever social structures still stand.

When people are atomised and afraid, they feel driven to defend their own interests against other people’s. In other words, they are pushed away from intrinsic values such as empathy, connectedness and kindness, and towards extrinsic values such as power, fame and status. The problem created by the politics of extreme individualism is self-perpetuating.

Conversely, a political model based only on state provision can leave people dependent, isolated and highly vulnerable to cuts. The welfare state remains essential: it has relieved levels of want and squalor that many people now find hard to imagine. But it can also, inadvertently, erode community, sorting people into silos to deliver isolated services, weakening their ties to society.

This is the third in my occasional series on possible solutions to the many crises we face. It explores the ways in which we could restore political life by restoring community life. This doesn’t mean ditching state provision, but complementing it with something that belongs neither to government nor to the market, but exists in a different sphere, a sphere we have neglected.

There are hundreds of colourful examples of how this might begin, such as community shops, development trusts, food assemblies, community choirs, free universities, time banking, Transition Towns, potluck lunch clubs, local currencies, men’s sheds (in which older men swap skills and make new friends), turning streets into temporary playgrounds (like the Playing Out project), secular services (such as Sunday Assembly), lantern festivals, fun palaces and technology hubs.

Turning such initiatives into a wider social revival means creating what practitioners call “thick networks”: projects that proliferate, spawning further ventures and ideas that weren’t envisaged when they started. They then begin to develop a dense participatory culture that becomes attractive and relevant to everyone, rather than mostly to socially active people with time on their hands.

A study commissioned by the London borough of Lambeth sought to identify how these thick networks are most likely to develop. The process typically begins with projects that are “lean and live”: they start with very little money, and evolve rapidly through trial and error. They are developed not by community heroes working alone, but by collaborations between local people. These projects create opportunities for “micro-participation”: people can dip in and out of them without much commitment.

When enough of such projects have been launched, they catalyse a deeper involvement, generating community businesses, co-operatives and hybrid ventures, which start employing people and generating income. A tipping point is reached when 10 to 15% of local residents are engaging regularly. Community then begins to gel, triggering an explosion of social enterprise and new activities, that starts to draw in the rest of the population. The mutual aid these communities develop functions as a second social safety net.

The process, the study reckons, takes about three years. The result is communities that are vibrant and attractive to live in, that generate employment, that are environmentally sustainable and socially cohesive, in which large numbers of people are involved in decision-making. Which sounds to me like where we need to be.

The exemplary case is Rotterdam, where, in response to the closure of local libraries, in 2011 a group of residents created a reading room out of an old Turkish bathhouse. The project began with a festival of plays, films and discussions, then became permanently embedded. It became a meeting place where people could talk, read and learn new skills, and soon began, with some help from the council, to spawn restaurants, workshops, care cooperatives, green projects, cultural hubs and craft collectives.

These projects inspired other people to start their own. One estimate suggests that there are now 1300 civic projects in the city. Deep cooperation and community building now feels entirely normal there. Both citizens and local government appear to have been transformed.

There are plenty of other schemes with this potential. Walthamstow, in east London, could be on the cusp of a similar transformation, as community cafes, cooking projects, workshops and traffic calming schemes begin to proliferate into a new civic commons. Incredible Edible, that began as a guerilla planting scheme in Todmorden, in West Yorkshire, growing fruit and vegetables in public spaces and unused corners, has branched into so many projects that it is widely credited with turning the fortunes of the town around, generating start-ups, jobs and training programmes. A scheme to clean up vacant lots in the Spanish city of Zaragoza soon began creating parks, playgrounds, bowling greens, basketball courts and allotments, generating 110 jobs in 13 months.

The revitalisation of community is not a substitute for the state, but it does reduce its costs. The Lambeth study estimates that supporting a thick participatory culture costs around £400,000 for 50,000 residents: roughly 0.1% of local public spending. It is likely to pay for itself many times over, by reducing the need for mental health provision and social care and suppressing crime rates, recidivism, alcohol and drug dependency.

Participatory culture stimulates participatory politics. In fact, it is participatory politics. It creates social solidarity while proposing and implementing a vision of a better world. It generates hope where hope seemed absent. It allows people to take back control.

Most importantly, it can appeal to anyone, whatever their prior affiliations might be. It begins to generate a kinder public life, built on intrinsic values. By rebuilding society from the bottom up, it will eventually force parties and governments to fall into line with what people want. We can do this. And we don’t need anyone’s permission to begin.

www.monbiot.com

 

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Political Appeal and Innumeracy

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U.S. federal spending in 2016 was roughly $4 trillion, and revenues were slightly over $3.4 trillion, leaving a deficit of around $600 billion. Out of total spending, $2.6 trillion was mandatory spending on programs such as Social Security, Medicare, and Medicare. Spending on these programs cannot be cut without major changes in federal law, and since 77% of all Americans oppose such cuts, it’s highly unlikely that major cuts will occur any time soon. Then add to that some $260 billion in mandatory payments on the federal debt, and essentially 72% of federal spending cannot be effectively cut, at least at present. That leaves $1.1 trillion in discretionary spending, that is, spending that can be increased or decreased by Congress.

Unhappily, the vast majority of Americans have no real understanding of even these basic numbers, especially Fox News viewers, 49% of whom declared in a recent poll that cutting “waste and fraud” would eliminate “the national debt” [which now stands at $14.4 trillion]. A number of polls over the year have shown that most Americans believe that 25% of the federal budget goes to foreign aid [it’s less than one percent], and that five percent of all federal spending goes to PBS and NPR [in fact, roughly a tenth of one percent does].

The real numbers are more daunting. The largest component of discretionary spending is defense, and while the DOD “official” budget is slightly under $600 billion, various contingency funds and defense activities funded in other forms and by other agencies [for example, the Coast Guard is funded by the Treasury Department], brought the total annual cost of U.S. defense much higher, as high as $900 billion, according to some sources, but even assuming $600 billion for defense, that leaves $500 billion for everything else, including agriculture, energy, education, transportation, federal lands management, national parks, environmental protection, veterans benefits, welfare payments, and a whole lot more.

Trump’s proposed tax cut would reduce federal revenues by $500 billion, according to the Tax Foundation, on top of that $600 billion deficit, so even if he could persuade Congress to cut non-defense discretionary spending by 50% — in essence gutting most federal agencies, the deficit would increase to nearly $900 billion, and that doesn’t count the additional spending he’s proposed for infrastructure spending – which initial estimates suggest range from $500 billion to over a trillion dollars, over ten years, or $50 billion to $100 billion a year.

Proponents of the Trump plans claim that all the new investment and jobs will increase tax revenues, and some probably will, but not anywhere close to enough to deal with the federal deficit that increases the national debt – and the interest that must be paid on it – each year.

Based on a 2014 study by Standard & Poors, if Congress were to pass a $50 billion a year infrastructure bill, that legislation would create an additional 1.1 million jobs. Construction workers make an average of around $35,000 a year, and, under the best estimate of the Trump tax plan, those million workers would pay around $4,000 in federal income taxes each, thus adding up to an additional $4.5 billion. Economists like to point to the multiplier effect, i.e., how many additional jobs are created by one new job. According to the IMF, under present conditions, the multiplier effect is hovering around one, one additional job created somewhere in the economy for each new job created by investment. So… fifty billion dollars of infrastructure investment might create somewhere over two million jobs and possibly add $10 billion in tax revenues while costing $50 billion. Even if the multiplier effect is five times as much as the IMF says, the infrastructure proposal is at best a break-even proposition, and, as such, might be a good idea. BUT… it won’t do much for reducing the current deficit, let alone the increase in the deficit that will be occurring as a result of more federal spending on defense, and the likely coming increase in interest rates.

The other bottleneck in increasing jobs is the mismatch between available workers and the available jobs. According to research from human resources consultancy Randstad Sourceright, a survey of more than 400 U.S. executives found a skills gap impacting their businesses. Four-fifths of those executives said that a shortage of sufficiently skilled workers will affect their companies in the next 12 months. Complaints of hard-to-fill factory jobs are backed up by Bureau of Labor Statistics data: 324,000 manufacturing spots were open in November, up from 238,000 a year earlier.

Another problem that the Trump approach doesn’t address is that jobs creation isn’t equal. Right now, employees of high-tech companies receive almost 12% of all employee compensation, but there are only seven million of them and the average salary is close to $105,000, more than double the salary of the average industrial or manufacturing employee, or triple that of a construction worker. In addition, the tech industries are only adding about 200,000 employees a year. That doesn’t do much for the nearly 15 million unemployed or underemployed Americans, or the roughly three million college graduates each year. The largest numbers of jobs are in the lower paid service industries, and all the investment money putatively freed up by the tax cuts will be going to tech-heavy companies, and those jobs comprise less than 5% of total U.S. employment.

Massive tax cuts, more defense spending, a major infrastructure initiative… all to be paid for by new jobs and cuts in such federal programs as PBS, NPR, the Endowments for the Arts and Humanities, foreign aid, and the like? The numbers don’t add up, even if the political appeal does, perhaps because most Americans don’t seem to understand the numbers, or care to.

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WSTC Seeking Input Through 1/18

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Here's an opportunity to have your voice heard:
The Washington State Transportation Commission would like to get your input on how our transportation system is working and ways to improve it. The survey is open until January 18. It includes questions about priorities for funding, like bigger highways vs. bike/ped infrastructure, and takes just a few minutes to complete.
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Deck the halls with neoliberal capitalism!

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Deck the halls with neoliberal capitalism!

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Grunt Work

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Last week one of my readers posted election turnout statistics, which revealed an interesting pattern – that Republican voters turned out with about the same numbers in every presidential election over the last twelve years, but that Democratic votes varied dramatically, apparently based on the “appeal” of the candidate, and particularly the appeal to African-Americans.

But it wasn’t just candidate appeal that affected turnout. With lawsuits recently upheld by the Supreme Court that restricted the ability of the Justice Department to monitor state election procedures, a number of states “consolidated” polling locations and reduced voting hours, and such restrictions have been shown to reduce minority voter turnout far more than they did Republican turnout, which is exactly what they were designed to do.

Such state acts have been currently held to be legal, but I’d hold that they’re scarcely moral, not that morality counts in elections. Only votes do.

And that gets down to the bottom line. Republicans have been working hard for years on a state-level strategy designed to create a political system more to their liking. They’ve gerrymandered Congressional districts so that Democrat voters are concentrated in fewer districts, which is the principal reason why the House of Representatives is overwhelmingly Republican. What also tends to get overlooked is that getting elected to the House gains an aspiring politician visibility and the ability to fundraise, and if there are more Republican representatives in a state’s delegation, then the Republicans have better odds in eventually electing more senators from that state.

What they’ve done is perfectly legal, but it takes time, effort, and money, all of which Republicans have, and have used effectively over the past decade and even longer, while much of the Democratic constituency is far shorter on all three.

The other factor is cultural change. Like it or not, we now live in a “celebrity” culture, and the key factor in celebrity is the ability to relate to people through the mass media. Bernie Sanders and Donald Trump could do this with their supporters, Hillary Clinton much less so.

In terms of the 2016 election, although it was far from obvious at the beginning, what this meant was that the Democrats were at what I’d call a structural disadvantage from the start, in that all the election-year “ground game” and organizational skills in the world would be hard-pressed to meet the Republican challenge without a “popular” candidate, and especially hard-pressed once they nominated Clinton.

What I’m saying is not an “excuse” for Democrats. What I’m saying is that Democrats have gotten out-organized, out-funded, and out-maneuvered. Democrats, and this includes others with the same concerns, such as the Black Lives Matter movement, have tended to focus on protests and lawsuits, but in the end votes count. No matter how necessary, or how worthy legal and political change may be, in our system that requires changing the laws. Changing the laws requires changing the lawmakers, and changing the lawmakers requires getting more votes at state and local levels… and working at that year after year after year, not just in an election year.
If you get enough votes, even the Electoral College comes your way.

And, as the old saying goes, the proof is in the pudding.

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