Monday, December 31, 2007

Pogo on Health Care: Yes, The Enemy Is Us

This was kind of fun. It pays to read the Thursday paper if you’re short of column ideas. The column by Austin Hill to which I’m responding is here, at least for about 10 days.


East Valley Tribune, Dec. 30, 2007

It’s said a conservative is a liberal who’s been mugged, and a liberal is a conservative who’s been indicted. But after Austin Hill’s column last week describing his “adventures” in the health insurance market, it shouldn’t require an indictment to make conservatives rethink their ideology. Trying to buy individual health coverage should suffice.

How did the “free market” treat Hill? Not particularly well, he admitted. But what Hill didn’t acknowledge, while complaining about corporate bureaucracy, waste, and having coverage he can’t afford to use keeping him from getting care he needs, is that he’s part of the problem.


Hill demonstrates why individuals, acting rationally, help make a “free market” in health care impractical, expensive, and inefficient. Hill’s first rational-for-him-but-bad-for-the-system move was using an insurance agent. (Hiring an agent, says Hill, is acting “all by yourself.”)

Hill didn’t use the Web or compare ads, much less read actual policies. An Internet-savvy video and satellite radio personality and published author didn’t feel capable and instead relied on someone employed by (and owing a duty to) the seller.

Unless sellers are forced to compete openly and transparently, they won’t, and consumers will lack knowledge and have to rely on intermediaries with inherent conflicts of interest. (That’s worked so well on Wall Street.)

Second, as the headline to Hill’s column noted, buying health insurance is “trickier” than buying a used car -- the classic example of a market dysfunction called “asymmetrical information.” The seller knows far more about the car than the buyer, who recognizes that the seller wouldn’t sell the car if continued ownership made economic sense.

So with health insurance; you know more about your health than the insurer possibly can, so sellers must protect themselves. Insurers recognize people only buy insurance if they think they’ll spend more in health care than the annual premiums.

Hill proved this point; he was eager to buy coverage so he could see a doctor for a serious sinus problem. (His agent warned him not to go until his coverage was “confirmed.” So he didn’t.)

This market dysfunction is called “adverse selection” because people who buy insurance are in a better position to know if they’ll need insurance. Those folks cost more to insure, which increases premiums, makes more people self-insure (or buy cheaper, catastrophic-only policies), which drives up premiums more, making more people leave the pool -- the “death spiral.”

Hill also found the free market to be a take-it-or-leave it proposition. He got an initial price quote, but once he decided to purchase, he got a higher “counteroffer.”

The term upset Hill, because “counteroffer” implies negotiation, and there wasn’t any; the insurer just decided to charge more. But legally, Hill had no choice; the original quote was subject to change, and it did. And it didn’t matter, because he bought the policy anyway -- because he was primarily concerned about price.

That’s another reason why Hill, acting in his self-interest, helps make the market dysfunctional. If buyers only care about price, then that’s how sellers compete. Insurers have no incentive to invest in anything with a longer-term payoff, such as wellness, prevention, or information technology. Consumers make those investments worthless by moving to a cheaper policy before any possible savings could develop.


None of these fundamental problems has anything to do with the private sector’s greater administrative costs and their own perverse incentives -- or that surveys show Americans most satisfied with health coverage are those on Big-Government-run Medicare.

Even if the insurance companies were Mother Teresa incarnate, the market would be dysfunctional dealing with price-sensitive, symptom-hiding, and self-interested consumers like Hill. The only reason why the U.S. system hasn’t totally collapsed is because we’re paying twice per capita as every other advanced industrialized country.

Hill, who usually has more answers than you’ve got questions, ended his column by asking “somebody” to develop a private-sector solution. Well, there isn’t one, not with consumers like us. Begging somebody running for president, or “we the people,” to think of a solution that doesn’t exist won’t cut it. It’s true in health care, too: Hope is not a plan.

Wednesday, December 26, 2007

Religion in Politics: JFK Yes, Mitt No

It’s time for another religion in politics column, a topic I haven’t broached for about 5 years. At least my opinions (and my examples, those 2002 Salmon signs!) haven’t changed that much since my last column, even if now we have all these Republicans telling us that there’s too much religion in politics these days. If you can tell any difference between what Mike Huckabee is saying about religion and what George W. Bush said about religion, I’d like to understand exactly what it is.

Huckabee has improved America in one way, however, as all the GOP bigwigs who are so fearful of him have given up on the so-called "War on Christmas." They must figure it’s like dealing with small children, you can’t be inciting the religious base at the same time as you’re trying to get them to go to sleep.

East Valley Tribune, Dec. 23, 2007

To my LDS friends watching Mitt Romney twist slowly in the evangelical wind, I say "I feel your pain." And to Republicans who thought the slickest Arkansas politician ever was Bill Clinton, nobody twists the knife as skillfully as Mike Huckabee.

Romney’s "religion" speech was like a soufflĂ©; it was fine when served, but as time has passed -- and as Huckabee has passed Romney in the polls -- it doesn’t look so great. The speech contained two contradictory ideas, glossed over in the rhetoric: That religion is the most important thing in public life, but that differences in religion are the greatest danger to public life.

Most people believe in a religion, but the speech proclaimed that there’s some large, all-encompassing tent called "Religion" in which all may dwell. Any resemblance to an actual religion, however, is strictly coincidental.

The Romney-Huckabee religious debate recalls the 2002 Arizona gubernatorial election, when anonymous "Vote Mormon" signs appeared next to Matt Salmon’s campaign posters. Salmon and this newspaper denounced the signs as "a cowardly, underhanded act of bigotry" aimed at anti-LDS prejudice.

However, it was fine for Salmon to let the LDS community know he was Mormon and go on Christian television and say he wanted "to reclaim government" for the Almighty -- but nobody else could mention his religion except only on his terms. That seems to be Romney’s position, too; he wants to say exactly as much as he wants about his religion, casting it as just another version of evangelical Protestantism, but nobody gets to say anything more without becoming a bigot.

Huckabee is fouling up these calculations, because he’s essentially putting up signs saying "Vote Evangelical." I sure don’t think the bookcase in Huckabee’s Christmas ad just happened to look like a cross. But Ronald Reagan taught me that in politics, don’t shy away from a fight if there are more voters on your side than the other guy’s. Huckabee’s done the math, and if the argument is religion, more GOP primary voters are with him than against him.

Huckabee also is preaching a second, non-religious sermon, of populist resentment. He’s started talking more about the "Wall Street to Washington" establishment opposing him, an establishment that likes having the religious right’s votes but ignores them afterwards. He’s making oblique references to 15-year-old slurs that still anger evangelical voters, who seem to be getting the point. It’s nice to have the GOP’s faux populism pushed back in their faces by a politician who clearly makes so many Republican power players uncomfortable.

So as a religious minority myself, it’s not that clear what Huckabee’s saying is so different than what GOP candidates -- including the Gipper -- have long said. If you say the East Valley is so great because we’re "very Mormon, very Catholic, and very evangelical," then those of us not in any of those categories might see your "tolerance" as very self-serving indeed.

Once you open the door to religion in politics, how much becomes too much? Some claim a significant moral difference between arguing "Vote for me, I’m one of you" (Vote Evangelical!) and saying "Don’t vote for him, he’s not one of us" (Vote Mormon!) That simply doesn’t work in practice; campaigns only spend money proclaiming "I’m one of you" if they think (or want voters to think) the other guy isn’t.

Huckabee (most of the time, anyway) is making the "positive" argument, but it’s working because the positive version makes the negative argument for him. And with his assertion that religion is the essential basis of democracy (quick, tell the Saudis!), Romney’s lost that argument.

If I’m a Jewish candidate and my opponent talks about how he accepted Jesus as his savior, thereby making the implicit point that I haven’t, is that OK? If so, then what’s Huckabee’s sin?

The usual right-wing complaint is that secular liberals want to drive religion out of the public square. Well, the public square has seen plenty of religion recently, and the usual suspects -- excepting Mike Huckabee and his supporters -- don’t seem very happy.

Tuesday, December 18, 2007

Throw Momma -- And Adopted Kids -- From The Train

This week's column suffered from editing. My proposed headline was even preferred by the editor, but he couldn't fit it into the allotted space (or get me more space for a good headline). I also came up with a better way to disclose my political contributions in the column tagline, but that joke got cut as well: "Coppersmith contributes to the campaign of John Shadegg's 2008 Democratic opponent every chance he gets." Instead, it was "Coppersmith has contributed to the campaign of Shadegg's 2008 Democratic opponent, Bob Lord." But they mentioned Bob's name, so we'll consider it a victory. Here's the newspaper version.

East Valley Tribune, Dec. 16, 2007

Rep. John Shadegg, defending his votes against providing insurance coverage to thousands of Arizona kids under SCHIP, said that nobody should vote for a bill because its name. That applies, in spades, to Shadegg's so-called "Health Care Choice Act."

The bill is designed, like most GOP policies, to help those who don't need it. It's not a "common sense" reform; it's about making life better for people who are healthy or rich, and preferably both. That's the role of "choice" in GOP health care plans -- choosing to make things better for insurance companies.

You immediately should be suspicious when Shadegg's bill gets lauded on The Wall Street Journal editorial page by the executive director of the Coalition for Affordable Insurance, whose Web site describes it as an "association of insurance companies, actuarial firms, legislative consultants, physicians, and insurance agents." You should expect CAI would endorse legislation that helps insurance companies, actuarial firms, legislative consultants, and the rest. You should not expect that they would endorse anything that would make your life better.

The concept is that people could choose to buy health insurance from anywhere. If they live in a state with lots of regulations and mandates, they could buy a cheaper policy from a low-regulation and no-mandate state. And if you were younger and healthier than average and didn't expect to need medical care, then you would buy a cheaper policy. And you'd be really happy, at least until you suffered some sort of medical problem. Then you'd be stuck, big time.

The sales pitch is "choice" for you, but the real purpose is letting insurance companies choose their customers. Instead of only cherry-picking customers in one state, Shadegg would let them pick cherries everywhere, insuring only those customers who won't need health care and dropping them as soon as they do, nationally.

Without state regulations, insurers could offer policies carefully constructed not to cover anything likely to happen. You'll have no coverage, but you'll get it really cheap! States trying to protect their citizens -- from fraudulent insurers, misleading advertising, and policies that don't cover vital health problems -- would be outflanked by low-regulation states.

Consider how the "expensive state mandate" works here. Arizona, according to CAI, is in the middle on mandates. One doesn't usually think of the Arizona Legislature as unfriendly to business or overbearing in consumer protection, but our legislators have seen fit to require health insurers to include certain benefits, certain types of health care providers, and cover certain types of persons in individual and small-business health policies (large employers are exempt under federal law).

Arizona requires insurers cover ambulatory surgery, breast reconstruction, clinical trials, contraceptives, diabetes self-management and supplies, emergency services, home health care, mammograms, maternity stays, mental health parity, off-label drug use, and PKU infant formula. Arizona mandates that policies cover medical treatment by chiropractors, dentists, nurse anesthetists, nurse midwives, nurse practitioners, occupational therapists, optometrists, podiatrists, psychologists, public or other facilities, and speech and hearing specialists. We also mandate coverage for adopted children, dependent continuation coverage, conversion to non-group, handicapped dependents, and newborns.

Sounds like a huge list, until you realize that according to the study relied on by CAI, the benefit mandates (like breast reconstruction and mammograms) don't cost all that much (comparatively speaking). The big dollars are in the access mandates -- the adopted children and newborns.

Say it costs more to insure adopted kids; they have more health problems than "regular" kids. Kentucky doesn't mandate adopted children coverage. Shadegg thinks you should be able to purchase a cheaper Kentucky policy without adoption coverage. It's cheaper for you, because you're not going to adopt. But if that means parents in Arizona with adopted kids then have to pay more, which leads some to drop coverage, which creates the "death spiral" where only the worst risks have to buy insurance -- well, that's not my department, says Rep. Shadegg.

Not everybody truly enjoys throwing kids from life rafts, but if that's the kind of world in which you want to live, John Shadegg's your guy.

Tuesday, December 11, 2007

The Limits of "Good Intentions"

Three of my Devereux friends now know to be careful about what you say to me at dinner, or else it could wind up in a column. The contrast between what it would take to fix Social Security -- all it requires is passing legislation, and it's a problem we don't face for decades -- as opposed to fixing urban schools -- which takes people, not concepts, and is happening right now -- is staggering. And which one takes political "courage" again?

East Valley Tribune, Dec. 9, 2007

I was talking with a behavioral health advocate who’s worked with troubled children for years. She could barely contain her excitement over new opportunities to change lives and improve communities. It's an exciting new program that provides emotional support to at-risk kids in some of our nation's most troubled urban school systems.

Research shows early intervention with these "positive emotional support" programs can prevent serious, more expensive problems later. The benefits go beyond helping the troubled kids; teachers using PES techniques become better at controlling the classroom, so they can spend more time teaching the entire class.

Early intervention has an economic benefit, too, which she planned to show to business leaders to get their support. Our economic future depends on local schools providing quality employees.

People talk about a Social Security "crisis," which really isn’t a crisis. If -- and that’s a big if -- the worst-case projections prove correct, minor tweaks can close any shortfall. It'll take a lot more effort to ensure we’re educating adequately tomorrow’s workers (who will pay for benefits for us retiring boomers).

Once the business community sees the data, said my friend, they’d become the biggest boosters for PES and early intervention. At which point, she lost me.

I recall too clearly how over a decade ago, the Phoenix business community rallied behind "Success by Six," a collection of early intervention programs providing similar support to at-risk kids before they fell into the juvenile or adult correction systems. Support of "Success by Six" became a test of moral seriousness, one that everybody -- political candidates and business leaders alike -- had to meet.

And it worked. With great fanfare, GOP Gov. Fife Symington and the Legislature adopted basically the entire program. Hooray!

But previously-announced tax cuts took effect, the economy cooled, and revenues didn’t meet expectations. It was easy funding new programs during flush times, but once money got tight, enthusiasm failed. Once the business community had to put "skin in the game" -- risking their real priorities, like tax cuts, to fund investments in kids -- then moral seriousness didn't matter so much.

People eagerly support pilot projects, hoping that some new paradigm revolutionizes education or welfare. The pilot project shows promise, so it should rolled out systemically, which requires serious money (i.e., taxes). However, business leaders have moved on to the next job or community, or are distracted by a different new shiny pilot program, uninterested in dull-as-dishwater institutionalization and funding.

It may be ideological, too. U.S. automakers should be screaming for national health care. They can make quality cars, but if they have to pay thousands per vehicle in employee and retiree health care costs, how can they compete with manufacturers in Japan, who don't? But they can't bring themselves to do it. They make vague statements of principles that can be deciphered as favoring a national solution, but nothing that anyone who watches (or writes for) Fox News would see as supporting "socialized medicine."

A big-deal business lobbyist I knew once called me for a friend with an obscure federal appointment obtained during the first Bush administration who wanted reappointment by President Clinton. This was for such an obscure position that I didn't know it was coming open. I told the lobbyist I'd be happy to call the administration as a favor.

The lobbyist immediately froze. No, he made absolutely clear, he wasn’t asking for a favor. He wanted me to support his friend only if it could be done for free -- like if I happened to be calling the White House anyway. It wasn’t a favor, which I might expect to have reciprocated.

Which is what I foresee happening with the data showing how cost-effective positive emotional support programs are in schools. The business community can support it, right up to the point where they have to put something real on the line. Hey, if our heart’s in the right place, leave our wallet alone. After all, who needs to give at the office, when instead you can feel at the office?

Monday, December 03, 2007

Free -- To Get The Fundamental Stuff Wrong!

I filed this column and almost immediately started to feel badly about going after LTH again, but then the paper came out on Sunday, and most of the real estate was devoted to a "roundtable" discussion of political philosophy between 5 really, really conservative writers for the Tribune (Turley-Hansen, Patterson, Hill, Templar, and the Freedom house libertarian guru). Yes, they wanted a range of opinions, from Y to Z.

My suggested headline was above but the editor went partisan instead.

East Valley Tribune, Dec. 2, 2007

Nobody told me, the lone dissenting voice hereabouts, that last week's Perspective section would be the annual tribute to R.C. Hoiles, the founder of the Tribune's current owner. The sweet salutes to our Orange County Editorial Overlords made my teeth hurt, reminding me how the Arizona Republic used to insist what a really swell guy publisher Eugene Pulliam was, because he only had your interests at heart.

Newspapers should leave the tributes to ownership to outsiders; it's hard to do a "balanced" piece on the boss (or the current bosses' deceased ancestor) without sounding like Yankee PR department tributes to George Steinbrenner. The Republic never could be as refreshingly accurate about their owners as The New York Times, which wrote that the Pulliam family "has long been a political force in Indiana and Arizona -- indeed, one investment banker pointed out that neither state observes daylight time 'because Eugene Pulliam always refused to change his clock.'"

But what was most striking in this year's celebration of the grandfather of the people who sign our checks is how readily Hoiles's followers forgive his apostasies. Apparently one of the most cherished libertarian freedoms is getting to choose which parts you accept, and which you don't.

The Tribune printed some of the home office's editorials applying Hoiles's philosophy to current issues. The top issue was terrorism, and according to libertarianism, the war in Iraq was a mistake; we should bring the troops home from all overseas outposts. "Terrorists may 'hate us for our freedom,' but they are able to recruit people to attack us because we are in 'their' countries, trying to run them."

One of Hoiles's biggest fans is the writer to my right, Linda Turley-Hansen, who last week on "Founder's Day" wrote how while she won't always agree with Freedom, we need Hoiles's ideas to "pull us back towards rational thinking" and "balance." But those ideas, that the war in Iraq is counterproductive and we should bring the troops home as soon as possible, are totally opposite to those of Linda Turley-Hansen, who declared on Memorial Day weekend that we must stay and must win in Iraq, which is an absolutely fundamental battle that we cannot avoid, that "retreat will unleash incomprehensible consequences."

Turley-Hansen also decries our open borders, and that immigration is placing our national identity and culture at risk. But the libertarian position on immigration is that "the right to decide where one wants to live and move there through one's own resources doesn't belong only to those born in America. The most effective and just way to regulate immigration is through market forces." In other words, open borders, and welcome all comers; it's an economic, not cultural, issue.

So how does this work? In May, to Turley-Hanson, nothing is more important than "winning" in Iraq, and our very national survival is at stake. In November, she says while she doesn't always agree, we sure need more libertarianism. But libertarianism gets "wrong," according to Linda, the absolutely most important, fundamental crisis we face, but somehow, that's O.K.

Linda in May says those who want to end the war and bring the troops home are "stupid" and "prepared to sacrifice the nation." Libertarianism says end the war and bring the troops home. But Linda in November thinks libertarianism is cool. These disagreements about Iraq and immigration? Mere trifles, easily overlooked.

Which is my problem with "libertarianism," at least as practiced around here. It's not a philosophy, it's a Chinese menu, where you get to pick only those dishes that suit your preexisting palate. Individual freedom is paramount -- except when we want the state to force women to bear unwanted children, or insist that government fight a "war on drugs."

This a la carte "Linda libertarianism" isn't a philosophy, but rather the latest attempt to make selfishness a moral value. I should pay less in taxes, and if I'm younger and healthier than average, I certainly don't want to share any of your health care risk. You, on the other hand, should fight my wars. Such a deal!