Replacing Obama Care With Something That Actually Works: Part 2

Over the past two weeks we have been reviewing the unfolding disaster that is Obama Care. The first seven posts were the result of our research into real life realities of people getting their work hours cut, their jobs terminated, seeing their insurance polices being cancelled, enduring their insurance premiums going up substantially along with their deductibles,  losing access to their doctors and hospitals, and the pitiful rollout of the Obama Care website.

The next four posts were detailed analyses and research by experts in the health care industry that verified what we had already proven: Obama Care is the worst piece of legislation ever created by the Washington political class. It fails on so many levels: data systems, logic, root cause problem analysis, cronyism, financials, etc,

Yesterday, we started to discuss how to fix what Obama Care has broken. Using the root cause analysis philosophy proposed in our book, “Love My Country, Loathe My Government,” we started to list out a series of simpler, easier to implement and more effective steps to combat high health care costs in this country. Obama Care provides an aspirin to make the pain of high health care more palatable but with very serous side effects. Our approach attacks the root causes of our high health care costs with no side effects.

Yesterday, we discussed how to terminate two of the leading cause of high health care costs:

1. Americans eat too much and eat too much of the wrong kind of food.
2. Americans smoke too much.

While resolving those two issues would be a gigantic step forward to a healthier America and lower overall health care costs, several additional common sense steps are required:

Root Cause #3 - Americans do not exercise enough. Yesterday, we discussed a recent piece of research from the Centers For Disease Control that found about one third of American adults are obese. It is very difficult to be healthy and free of medical costs over the long term if you are obese. The strain on the heart and kidneys from obesity leads to heart disease and diabetes.

Thus, a public health effort is needed to get Americans up and moving. Having insurance under an Obama Care scheme does not reduce obesity, get Americans exercising, or reduce health care costs. I am not a public health care expert but here or a few things that could be done to get America moving:

• Make Americans pay more for insurance if they are overweight since they incur a higher level of medical needs than non-obese people, i.e. led the cost causer also be the cost payer, as a little motivation to get in shape.
• Leverage contacts with the NFL, NBA, NHL, and MLB to get those high profile athletes involved in community health and exercise programs. If the leagues do not get involved then do not invite their championship teams to the White House for a photo op as has been the custom for decades. Help us get America in shape and get to visit the White House. 
• Subsidize YMCA and other gym memberships to get people moving, spending a little money now to avoid a lot more money down the road. Set up the program so that if people do not go to the gym, they pay more than if they do go to the gym.
• Make getting in shape a  national priority of the White House with high visibility events with celebrities to get America moving.
• Other efforts that true public health officials can come up with beyond my layman’s ideas.

It took America decades to get into the most obese situation in the history of mankind. Only a concentrated, long term public health effort can reverse that trend and start reducing the cost of obesity related health care costs. Obama Care does nothing of the sort.

Root Cause #4 - The age of America is getting older. With an aging population comes a lot of aging diseases such as dementia, Parkinson’s, Alzheimier’s, higher incidences of cancer, etc. Without curing or mitigating these ravaging age-related diseases, it makes no difference if Obama care works or not, the overwhelming costs of these aging diseases will crush the health care industry and our economy.

What is needed is something akin to the bold challenge that JFK threw out to the country in the early 1960s when he dared the country to put a man on the moon by the end of the decade. That challenge gave the nation a focus and a drive that eventually was realized.

The same challenge should be laid down in this area: 

• Within ten years, reduce the incidence of breast and lung cancer by X%.
• Within ten years, find cures of dementia and Alzheimer’s diseases.
• Within ten years, find cures for Parkinson’s disease.

I am obviously not the right person to lay out the eventual goals and success criteria for such worthy goals. But somewhere in this country someone is capable of doing so and by putting together a plan, with regular benchmarks, maybe we can duplicate the success of the Kennedy moon dare with a handful of focused health care dares today.

Obama Care does nothing of the sort, making Americans healthier. All it does is provide overpriced, generalized health care insurance without regard to improving health.

Root Cause # 5 - Tort Reform. One of the important drivers of escalating health care costs is the threat of malpractice litigation by an over energetic legal class. This threat of malpractice legal action results in two bad drivers of high health care costs:

1. Doctors over prescribe tests and analyses in order to make absolutely sure that their actions could withstand a review in court even though defensive actions, loads of extra tests,  are usually not necessary or warranted.
2. Outlandish malpractice decisions and settlements increase doctors’ malpractice insurance costs which are  then passed on to consumers of those doctors’ services.

It does not have to be that way. Many states have taken tort reform action, resulting in substantial sanity brought into the litigation arena and the reduction in costs. We examined these success stories in the following post:

http://loathemygovernment.blogspot.com/2009/11/please-do-not-bother-me-with-facts.html

Highlights of that post include the following realities (source: American Tort Reform Association website):

• The state of Texas implemented significant tort reform in the medical field in 2003.
• Soon after the legislation, the AMA dropped Texas from its list of states in medical liability crisis.
• Malpractice claims went down and doctor recruitment and retention are up.
• The five largest Texas insurers actually CUT their insurance rates which saved doctors tens of millions of dollars.
• The Texas Medical Liability Trust, the state's largest liability carrier, reduced its premiums by 17%.
• Fifteen new insurance companies entered the Texas market.
• Health Care Indemnity, the state's largest carrier for hospitals, reduced its insurance rates by 15%.
• The American Physicians Insurance Exchange and the Doctor's Company also reduced their premiums.

Tort reform in Mississippi caused the following to occur:

• The Medical Assurance Company Of Mississippi, which provides malpractice insurance to 70% of the doctors in Mississippi, reduced premiums 5% in 2006.
• This comes on the heels of not raising premiums in 2004 and 2005 after raising them up to 20% a year in earlier years.
• Four other insurance companies returned to Mississippi to do business, likely resulting in more competition and further malpractice cost reductions.

Tort reform in West Virginia caused the following to occur:

• An increase in the number of doctors practicing in the state.
• West Virginia Physicians' Mutual sought permission to reduce malpractice insurance 5% in 2005 while insuring more doctors.
• Woodbrook Casualty Insurance also applied for a rate reduction.

Given these results, why wasn’t tort reform a major portion of Obama Care? Reduced insurance costs leading to reduced health care costs leading to more doctors and more competition, all good things. Want to bet the ABA lobbyists had a lot to do with that?

In our root cause analysis and solutions, tort reform is a major resolver of our high health care costs problem.

Root Cause #6 - Limited insurance company competition across state lines. More competition in any aspect of human events results in better products and lower costs. Unfortunately, in this country, there are a lot barriers to insurance companies competing across state lines. Simple solution: terminate those state line barriers and allow any insurance company to compete anywhere in the country for health insurance customers. There is very little, if any, downside to cross state competition.

Root Cause #7 - Atrocious Federal government inefficiencies in existing health care programs. Many times in this blog we have pointed out how inefficient and disgusting the waste and fraud is in the Federal government’s administration of Medicaid and Medicare:

• Medicaid wastes or loses to fraud and criminal activity between $30 to $40 billion a year.
• Medicare wastes or loses to fraud and criminal activity between $70 to $90 billion a year.

Thus, if Obama and the Washington political class were actually running an efficient government operation, they would have had anywhere between $100 billion and $130 billion a year to either get Americans healthier, leaner, and off of the smoking habit or would have been able to provide health insurance payment support without disrupting every American’s life and destroying the economy.

Consider the math. The latest, reasonable estimate of uninsured Americans I remember seeing is about 40 million. If we take the midrange of the waste listed above, $115 billion a year, we could give every uninsured American almost $2,900 a year to cover their health insurance costs. A family of four would get about $11,500 a year to cover health insurance, more than enough for a good family insurance policy. 

Instead, given the incompetence of Washington, that $115 billion or so is wasted every year and now the same people that cannot manage Medicare and Medicaid want to manage a whole new government program without fixing what is wrong today. Insane. 

There is enough wealth in this country to get everyone covered without new taxes, without cutting worker’s work hours down to under 30 hours a week, without killing job growth, without taking away freedom or choice, and without another massive government bureaucracy. Too bad the President and Congress have no idea how to operate efficiently.

That’s it, resolving the high cost of health care in this country without the idiocy and waste of Obama Care, is simple if you know how to solve a problem and define the underlying root causes:

1. Americans eat too much and eat too much of the wrong kind of food.
2. Americans smoke too much.
3. Americans do not exercise enough.
4. Americans are getting older on average resulting in a substantial increase in aging-related diseases.
5. There is an urgent need for tort reform to reduce doctors’ operating costs.
6. There is an urgent need to allow more insurance company competition across state lines.
7. There is an embarrassingly high need to force the Washington political class to stop wasting taxpayer wealth today on existing health care program, shifting that saved wealth into helping uninsured Americans survive health crisis without destorying the country and the economy in the process.

Seven root causes, all resolved with simple solutions that we have proposed over the past two days. However, simple solutions is usually a foreign concept to those in the White House and Congress, leaving us with a Rube Goldberg contraption called Obama Care with way too many moving parts, way too many unnecessary parts, and no chance of success. 

Remember, try to pare things down, few moves accomplish a lot. Public health drives, tort and insurance reform and fixing existing health care programs. Those are the only few moves that are needed to resolve a big societal issue. 

Tomorrow we will look at a few alternative solutions, based on work done by Republican politicians, work that the mainstream media has deemed to never show in the light of day.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Term Limits Now:http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.robertringer.com/
http://www.youtube.com/watch?v=08j0sYUOb5w

China: Big Problems But With a Plan, The United States: Big Problems But Without A Plan

Although China has gotten a lot of favorable praise over the past few years because of its economic growth, all is not well in the most populated country on earth, according to a feature article in the October 8, 2010 issue of The Week magazine:

• A great deal of China's economic growth and activity relies on export growth and when the rest of the world's economies went through their downturns, demand for Chinese imports also dropped significantly. As a result of this external dependency, 100,000 Chinese factories closed which resulted in 30 million Chinese workers losing their jobs. Domestic economic consumption, which accounts for only 36% of the gross domestic product, could not pick up the slack.
• More than six million Chinese college graduates enter the Chinese workforce every year but the vast majority of them will not land a job that is commensurate with their education level. They often ending up working for less than $500 a month which is just a little bit more than the average factory worker. This year, about one million college graduates are competing with each other to land 15,000 government jobs.
• In the past few decades, over 200 million Chinese peasants, about 15% of the total population, have migrated from farms to cities looking for work. Most have ended up working in low end jobs with no benefits and low salaries. However, most of them have now been exposed to how the small majority of wealth Chinese live, resulting in a growing resentment between the working poor and the new professional class arising in China's cities.
• China saw widespread strikes and demonstrations earlier this year protesting the low wages and poor living conditions of many workers. Across all of China, per capita income is only $3,678. In the midst of this poverty, sales of Jaguars, Mercedes Benz, and Rolls Royces grew more than 100% in a single year.
• China's growth has caused the country to become one of the most polluted and toxic environments in the world. Sixteen of the top twenty cities in the world with the most polluted air are in China. Half of China's rivers are rated as severely polluted. Extensive road building, mining, and other construction have left the countryside scarred and subject to mudslides and floods. As an example, the article cites mudslides this past summer that left over 1,700 Chinese either dead or missing. The World Bank says that by 2020 as many as 30 million Chinese may become "environment refugees," roaming the country in search of clean water and air. Very scary stuff.
• Those Chinese citizens that protest environmental and political problems are often thrown in jail.Wow, unemployment problems, import/export problems, pollution problems, income disparity problems, etc. Sounds overwhelming bad. A lot of the same problems that plague our economy and society also are a big problem for the Chinese.

However, the Chinese government at least has a rational plan to try and solve their problems. Consider the findings of an article in the October 18, 2010 issue of Business Week magazine:

• The Chinese government is about to issue its next five year plan.
• This next plan is expected to emphasize a shift to domestic consumption in order to not leave the Chinese economy so dependent on the economies of other countries.
• From a social perspective, the plan will focus on solving the income disparity issue by raising the minimum wage, building up its social safety net programs, and encouraging investment throughout the country, not just in the urban areas. These steps should also help grow the domestic consumption by providing more disposable income to more Chinese.
• It will pay close attention to growing its less polluting services sector while it reduces its reliance on heavy polluting manufacturing and heavy industries sectors.
• Going back to the article  in The Week, that article also mentioned that the government will invest at least $440 billion over the next ten years in green technologies to address its pollution problems.

Although the problems in China are large and complex, at least they have a plan to address them. They took the time to understand the root causes of their problems and then developed plans to address them:

1. Too much pollution: transition the economy to less polluting industries while investing in green technology.
2. Too much reliance on exports: enlarge the domestic market for Chinese produced goods and provide more disposable income for their citizens to fuel the growth in domestic consumptions.
3. Too much income disparity: do not take from the rich and give to the poor via taxation, raise the minimum wage level for everyone, i.e. do not make everyone the same by making the rich poorer, make the poor richer. The former approach would never work anyway since there are way too many poor to be made rich by attacking the rich.

They have a process and plan to fix what ails them. I do not know how successful they will be but at least they are trying to problem solve in a traditional and usually effective manner: define the root cause of your problem, analyze alternative ways of addressing the root causes, and then focus your resources on leveragable solutions to eliminate those root causes.


Now, compare their approach to the long term plans and strategies that our political class has developed. Unfortunately, you cannot do that since our political class, across both parties, have not come up with a long term, leveragable strategic plan for the country. The same issues that plagued the country forty years ago are still present, and in many cases are worse than ever: failing public schools, lost war on drugs, illegal immigration, non-existent energy policy, rising health care costs, etc.

 Now, some people would argue with my assertion but I challenge anyone to tell me what is the long range strategic plans of the United States. The only plans our politicians have is how to get themselves elected and stay elected. There is no root cause analysis being done, no discussing alternatives and compromising in the search for solutions, and certainly no effective long term strategies being implemented.

 Still do not believe me? Consider some recent "major" legislative initiatives:

• Obama Care Legislation - this plan is very similar to the Massachusetts state health care reform bill. However just a few years after it was implemented, the Massachusetts plan is severely overrunning its budget, has not reduced hospital emergency room visits (one of it's main goals), is currently reducing benefits, and looking to delay registration of new enrollees. Economic analyses of the entire 2,700 page Obama care law by various experts is now showing that the financial basis of the bill is pure fiction. Disaster.
• Financial Industry Reform Legislation - the bill excluded three of the biggest components of the financial industry in this country, auto loans, Fannie Mae, and Freddie Mac. You cannot say your reformed an industry when you purposely exclude three of the biggest components. Plus, what was included in the bill was mostly fluff, leaving the heavy lifting of reform to unelected Federal bureaucrats. Disaster.
• Cash For Clunkers - multi-billion waste of money, a standalone disaster of a rebate program that gave away taxpayer money but did not result in incremental sales. A program that was totally non-leveraged in any way, indicating a lack of understanding of root cause analysis and problem solution. Disaster.

These are not strategic long term plans, these are amateurish attempts to fix a set of problems without understanding the root causes of those problems. The Chinese political class seems to understand how to problem solve since many of their leaders are engineers, who are trained as scientists and problem solvers, as compared to most of our politicians who are lawyers.

We are faced with a double whammy. The Chinese political class contains better problem solvers AND... they have a large amount of financial flexibility, given how fast their economy has grown over the past decade. Our political class has not shown an ability to solve problems AND... they have very little financial flexibility since they have wasted trillions of dollars in bad economic policies over the past few years.

Thus, how do we solve our problems and finally move the country forward on a viable long term path? Two things have to happen. First, the political environment in this country has to become much more respectful and civil. No constructive dialog and problem solving can happen when we are yelling at each other, calling each other names, demonizing those that have a different opinion, and mutual respect is non-existent. Last year, respected Democratic moderate Senator, Senator Evan Bayh of Indiana, decided not to run for another term despite the fact that he was well liked, well respected, and his family had a long tradition of political service. In an interview with Charlie Rose in Business Week he expressed his feelings on how the political environment had become so poisonous and mean-spirited that it was not longer an enjoyment to serve the country.

In the November 7, 2010 issue of Parade magazine, an article about retiring Congressman Bart Stupak conveyed the same frustrations. Consider some of his quotes and experiences from the article:

• "It's so hateful now. My colleagues tell me, 'You look smarter every day for leaving.'"
• "Every boundary of decency has been crossed."
• "The more personal you can make the attack, the more money you can raise to defeat your opponent."
• When asked if only the mean spirited or thick skinned will now enter politics, he responded: "add one more element: the very rich. So many good people would be proud to serve, but they wind up saying, 'If the other guy spends $3 million, what chance have I got?' The most money and the sharpest attacks tend to win."

The second thing that needs to happen to move the country forward is that we have to self-finance our way to a flexible and long term solution. The Chinese have the luxury of a large currency and wealth surplus from their incredible economic growth over the past decade. We need to be much more creative from a long term planning perspective. We are in a deep financial hole in this country, without those type of Chinese economic resources.

Thus, in order to change our strategic direction, we need to quickly and deeply downsize the the federal government bureaucracy and use those freed up budget dollars to refocus the country's priorities. We need to break out of our current rut, a rut that New York Times columnist David Brooks called "immobile government." An immobile government is one that has become so fat and so stiff that it is no longer efficient or effective. We spend and prioritize great amounts of money and energy on the wrong things for any number of reasons:

1. We have always done it that way and never considered not doing it in an immobile different way.
2. Our politicians have a financial and electability stake in not doing it in an immobile way.
3. Our politicians are not smart enough from a problem solving perspective to not to it in an immobile way.

Many of the fifty steps described in "Love My Country, Loathe My Government" address this immobility issue. I will not go into all of them now but they range from Step 1, which would downsize the Federal government by 10% a year for five years to Step 41 that would establish a code of conduct for elected representatives (of which the concepts of teamwork, respect, and integrity would be integral parts). The entire book is focused on making the immobile mobile, the inefficient efficient, the ineffective effective and the politicians in this country problem solvers.

We have problems but worse than that, we have no plan. It is time to start stop being immobile and start doing things differently, doing the same things we have been doing are not solving our problems.

Consider the wise words of Albert Einstein:

"The definition of stupidity is doing the same thing over and over and expecting different results."

Let's not be stupid anymore. Let's demand that our political class change the way they do business, start treating each other and American citizens even if there are differences of opinion, and finally start problem solving for the good of the country and not the good of their political careers.


Our recent book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

http://www.cato.org/


http://www.robertringer.com/


httprealpolichick.blogspot.com/


http://www.flipcongress2010.com/


http://www.reason.com/

Healthcare Reform = Paris Hilton

As a follow up to our discussion yesterday regarding Obama's health care reform legislation, let's talk about problem solving today. No where in the Congressional and public debate about this issue have I seen anyone define the root cause of the problem. As laid out in the book, what is the real cause of escalating health care costs in this country? Is it because doctors make too much money? Do lawyers drive up cost with phony malpractice law suits? Do drug companies make too much profit? Is the American public health care system riddled with fraud with crooked doctors, lawyers and criminals scamming the system? Is government paperwork to massive, adding costs to the system?

Nowhere and no one, that I can see, has done a simple problem solving exercise in this area to 1) identify the root cause(s) of the problem 2) quantified the impact of the root cause(s) and 3) developed a solution to solve the root causes. Until you know the root cause of a problem any solution you propose is just a crap shoot, you may or may not solve the problem. In Obama's case, he and other members of the political class are willing to take over a trillion dollars of our money to the crap tables and gamble they can solve the problem without identifying the cause of the problem. Escalating American health care costs are the symptom, not the cause.

Thus, the Paris Hilton analogy: Paris Hilton is famous because......she is famous. Health care costs are high .......because health care costs are high. It is circular reasoning in both cases, not problem solving. Thus, when ever you see a member of the political class stating that we as a nation need to spend a trillion dollars to fix health care costs because costs are too high, think of Paris Hilton solving the problem instead. Both parties will have the same chance of getting it right.