Newsflash from Someone Who Actually Understands Obamacare

This brilliant Onion article illustrates how difficult it is to have a legitimate policy discussion about a topic as complex and personal as healthcare. I thought it would be appropriate to link to and quote from an excellent op-ed from a pediatrician and health policy researcher named Aaron Carroll (he is an author of a phenomenal blog about healthcare policy and research). The piece is here, and you should read it in full.

Aaron cuts through the noise from both sides of the debate that pervades the ACA and its implementation. Proponents naturally gloss over the parts of the law that create losers (yes, some people will pay more for insurance than they did before, or pay penalties that they did not before). Opponents seem oblivious to the difficult problems that the ACA is attempting to address (there’s not a lot of discussion on the right about how poor healthcare is in our country for a significant percentage of its population) and deny that there could be any benefits to the law.

Carroll:

This week, the New York Times published an article explaining that the savings many people hope to see in lower-cost insurance could come at the cost of fewer choices with respect to health care providers. This is very true.

If we want to be realistic about health care reform, we have to acknowledge that everything comes with a tradeoff.

Carroll is a (measured) proponent of the ACA. He doesn’t think it is perfect, but he recognizes that the ACA is trying to solve specific problems with the U.S. healthcare system, and that any solution will involve nontrivial tradeoffs.

More:

In order to make insurance cost less, private insurance companies have to make use of the tools available to them.

In the past, they could have tried preferentially to cover healthier people and refuse coverage to those with chronic conditions. That leaves a cheaper risk pool, which results in lower premiums.

But Obamacare no longer allows that. If we want guaranteed issue and community ratings (so that no one can be denied insurance and no one can be charged more for being sick), then insurance companies must use other strategies to save money.

 Carroll explains how many insurers are choosing to limit the network of physicians covered under the plan in order to offer lower premiums on the exchanges. He then notes that certain people’s health insurance network will shrink as a result of the ACA (a bad thing).

Finally:

No policy is perfect. On the whole, I believe far more people will benefit from Obamacare than will be hurt by it. Any change will inevitably make someone unhappy. This is one of those situations.

We would all benefit if we shared Carroll’s perspective on healthcare reform, and indeed, for all policy discussions. Policies have real impact, with real good and real bad that happens to people. Something can be good overall and leave certain people worse off than they were. Everyone trying to implement or advocate for a given policy should own up that fact. And opponents should make the case as to why the policy on the whole is a bad thing, not just that it has some bad effects. Read Carroll’s whole piece!

Why You Should Care About Income Inequality and Stagnation

Via Tyler Cowen, the Census Bureau just put out the numbers on poverty and income for 2012. It’s not surprising, but worth a ponder. As highlighted by Ryan Avent at the Economist, here is a graph of incomes by income percentile:

Basically, while the median American had about 19% more income in 2012 than in 1967, the median American’s income has roughly stagnated since the 1990s.

Neil Irwin at the Washington Post zeroes in on the median household income from 1987 until 2012 to show that median American household income has not increased significantly since its 1989 level of $51,681 (in 2012 dollars, vs. 2012 median income of $51,017).

To put it mildly, this is a very disappointing trend. It has been the case for almost two centuries that parents could expect their children to be better off than they were. It’s unclear that we can make that prediction today about our children, which is profoundly unsettling.

Another very concerning aspect of this inequality and stagnating incomes is a thought that goes all the way back to Aristotle. Aristotle thought that economic inequality would lead to political unrest. It would seem that this may not occur when everyone’s incomes are rising, but the rich people’s wealth is rising more rapidly. However, what happens when the rich get richer and everyone else stays about the same?

One way in which Aristotle’s theory might work is through a mechanism of functional disenfranchisement proposed by political scientist Larry Bartels. Bartels finds that, when the opinions of the rich and the poor diverge, politicians (not too surprisingly) side with the rich. This sort of functional disenfranchisement of the poor could plausibly lead poor people to conclude that the game is rigged, and that they really don’t have a say in political outcomes of the country. That, in turn, could lead to unrest.

And that is why we should all care about income inequality for more than just social justice kinds of reasons, especially when median wages are stagnating for decades.

What Policy Can’t Do

Sometimes I come across a couple of articles that disturb me deeply, and in this case, have me thinking about the limits of policy. First, via The Incidental Economist, here is a horrifying story about how a neurosurgeon who maimed 4 and killed (yes, killed) 2 patients, over a period of years, without being stopped. To make it even frightening for patients in Texas, no one who was looking for a neurosurgeon, up until his medical license was revoked in June 2013, had any way of knowing about those maimings and killings.

(On a brief policy note, the author blames Texas’ tort reform, which many people incorrectly blame for high health costs. See Aaron for a comprehensive review of how Texas tort reform hasn’t worked in any substantive way to control health care costs).

From the article:

Physicians who complained about Duntsch to the Texas Medical Board and to the hospitals he worked at described his practice in superlative terms. They used phrases like “the worst surgeon I’ve ever seen.” One doctor I spoke with, brought in to repair one of Duntsch’s spinal fusion cases, remarked that it seemed Duntsch had learned everything perfectly just so he could do the opposite. Another doctor compared Duntsch to Hannibal Lecter three times in eight minutes.

More:

After surgery, the patient, Barry Morguloff, woke up in more back pain than he’d started with and had no feeling in his left leg. For the next several months, he was in constant pain, according to Mike Lyons, his attorney. Scans later revealed bone fragments from Morguloff’s vertebrae lodged in the nerves of his back, according to Lyons.

Three weeks later, Duntsch performed a spinal fusion on Jerry Summers, a childhood friend. During the surgery, Duntsch sliced into one of the arteries running down Summers’ spine, causing massive bleeding, which he tried to staunch by packing coagulants around the wound. When Summers woke up he couldn’t move his arms or legs. Rather than immediately ordering scans to find out what was wrong, Duntsch moved on to other patients, according to Kirby’s letter to the Medical Board.

Baylor brought in a senior surgeon to fix the damage to Summers’ spine. His report was damning. He blamed Summers’ paralysis on Duntsch’s “surgical misadventures,” which had led to the artery being cut; the final straw, he wrote in his report, had been the packing of coagulants around the cut, which had seriously damaged Summers’ spinal cord. Topping it all off had been Duntsch’s failure to order tests and re-operate on Summers in a timely manner—a delay that likely cost his childhood friend the use of his arms and legs, according to the senior surgeon’s report. Summers remains paralyzed.

And there much, much more.

Second, Reuters has put together a massive special report on the practice called “private re-homing.” This is a polite way of describing people who adopt kids, decide they don’t want them, and put them up on the Internet to the first person who says “I’ll take them!” Despite the obvious reaction of anger at callousness of the parents who adopt kids, often from overseas, without considering the cost, the real tragedy is what happens to these kids. They already were in a bad situation (why they were adopted), and then they are shipped off to someone who is often at least unprepared and at worst guilty of child pornography. They end up with people like this woman:

• Child welfare authorities had taken away both of Nicole Eason’s biological children years earlier. After a sheriff’s deputy helped remove the Easons’ second child, a newborn baby boy, the deputy wrote in his report that the “parents have severe psychiatric problems as well with violent tendencies.”

• The Easons each had been accused by children they were babysitting of sexual abuse, police reports show. They say they did nothing wrong, and neither was charged.

• The only official document attesting to their parenting skills – one purportedly drafted by a social worker who had inspected the Easons’ home – was fake, created by the Easons themselves.

Or like this pedophile:

Winslow – lovethemcute – was 41, balding and paunchy. He swapped pictures of naked children and would later spend time in a chat room called baby&toddlerlove, where he described himself as a “lil boylover,” court documents show. There, he would graphically boast of molesting boys and explain how to keep the abuse quiet: “Just have to raise them to think its fine and not to tell anyone,” he wrote in a chat with an undercover federal agent. “What is done in the family stays in the family.”

It’s long, but it’s worth the read in full (part 5, “The Survivors,” has not yet been posted).

Apart from the tragedy to these re-homed children and those maimed patients, and the attendant benefits of awareness to these issues, the question of relevance to this blog is: what can be done to stop this sort of activity? Let’s start with the re-homing. Tyler Cowen is skeptical of the implied solution in Reuters report, which is that the government should be more pro-active in regulating these re-homings and in vetting the people who want to accept the children. He writes:

Is the solution to make the initial adopting parents keep the girl?  That seems doubtful.  Are the children better off being sent back to an orphanage rather than being re-gifted?  Possibly so, but this is not obvious.  From a legal point of view, for sure.  But as for the utilitarian and Benthamite angle?  A lot of evil parents might keep their newly adopted children (and to the detriment of those children) because return to the orphanage could be bureaucratic, costly, and also humiliating, at least compared to giving them away rather rapidly over the internet.

Should we screen adopting parents more rigorously, so as to prevent lemon parents from adopting in the first place?  Well, maybe, and if you read the article you will see some cases where better upfront screening would have been highly desirable.  But tougher screening as a general rule?  I don’t know.  Adoption is already costly and bureaucratic, it is on average welfare-enhancing, and maybe we can’t easily screen out most of the lemon parents anyway.  Etc.

In other words, Cowen doesn’t think that the most obvious policies would really do anything to benefit these kids. I agree. The question becomes: what do you do when you read stories like this then? Do you read it, think some sad thoughts, and move on? That’s not good enough for me, and I daresay it’s not good enough for most people. That’s why the drive for a new (or a stronger) policy to help these kids exists in the Reuters article. Clearly, the people offering the kids up for adoption aren’t going to self-regulate, and equally clearly, the people taking the kids won’t, either.

For the question of how to stop future neurosurgeon from maiming and killing patients, and for letting the public know, the solution is less murky, but still far from unambiguous. Texas enacted the tort reform and other laws that are easy on doctors for a reason. You might argue that the purported benefits aren’t justified by the costs (i.e., the benefits of tort reform are not that large, which Aaron does a great job of explaining, while the costs, as outlined in the piece about the neurosurgeon, can be devastating). I think the case against tort reform is pretty clear in this case. But again, tort reform was supposed to be a way to limit the practice of defensive medicine and therefore lower the excessive cost of health care in the United States. The problem is that every policy that cuts health care costs will have substantial costs associated with them.

I have a few scattered thoughts that will take the place of a proper conclusion:

1.) The world is a terrible place, because we humans are often very evil people to each other (or negligent)

2.) Policies that try to mitigate or decrease the effects of 1.) will never be extremely effective, and will often involve significant costs.

3.) Policy to mitigate 1.) are really hard, and really complicated. There will also always be people arguing that the policies are too costly (not just financial) and that the policy won’t actually reduce the effects of 1.) by all that much. This is the reason that I tend to think that specialists and people with deep technical expertise within a given field will do a better job of crafting policies than people who believe they have the “simple, down-to-earth” understanding of people and their behavior (yes, there are problems of regulatory capture etc. that can dominate the benefits I’ve sketched here).

But that’s why the title of the blog is what it is. We should acknowledge the uncertainty, try to understand as much as we can, and then do our best to use that understanding to craft intelligent policies that actually do limit the effects of 1.) while minimizing the costs.

The Health Aftermath of 9/11: a PSA

My wife pointed me toward this article about an aspect of 9/11 that I had never thought about: the massive exposure to carcinogens for any of the first responders and volunteers who were on-site in New York, Washington D.C., and in Somerset PA. Almost 3,000 Americans died on that day, and over 1,100 people have already reported getting cancer because of the carcinogen exposure on 9/11. The authors write:

In addition to the trained first responders, countless volunteers, eager to lend a hand, descended upon New York City and Washington, D.C., to rescue fellow Americans and remove debris.

In the process, they were exposed to hundreds of thousands of tons of toxic debris that blanketed the area, including many known carcinogens.

Twelve years later, more than 1,100 people have reported cases of cancer stemming from the September 11 attacks – and doctors expect that number to grow. 

They provide a link to this site where anyone affected can apply to get benefits from the WTC Health Program, for free. But you have to sign up by October 3, 2013.

Consider this a tiny megaphone. I don’t know anyone who was at any of these sites, but maybe I know someone who knows someone. Spread the word!

It is a big deal that Obama asked Congress to vote on a Syrian strike

I was little-kid excited when I heard that President Obama had asked Congress to vote yes-or-no on a Syrian strike. I was excited because it has been 66 years since the President has asked for such an authorization prior to a strike. This was big stuff. The spirit of the Constitution on the separation of powers, I thought, was finally getting the respect it deserved. A President was actually asking Congress to do something that he typically just does.

That was big news to me–I smiled big, read excerpts of the speech to my wife, and then called my brother to talk about it.

After that happened, my mood has been tempered by certain facts. First, I read that former President George W. Bush sought authorization from Congress prior to both of the U.S.’s invasions Afghanistan and Iraq. So this is not exactly the first time a President has asked for authorization for military action.

Second, Cass Sunstein (a legal scholar who worked with President Obama in the past)  gave a good historical defense of why President Obama could strike Syria without prior approval (briefly: the words “declare war” in the Constitution was a compromise between people who wanted the President to have stronger war powers, and those who wanted those powers to be exclusively in the hands of Congress. That implies that there’s probably some military actions that fall short of “declaring war” that the President has the power to execute unilaterally–else why would the wording be a compromise?).

Finally, Eric Posner over at Slate presented a powerful case that the President’s actions were primarily and fundamentally motivated by politics, and that we should not credit him with a shred of acclaim because of his choice to bring Congress into the decision. Posner argues:

His motive is both self-serving and easy to understand, and it has been all but acknowledged by the administration. If Congress now approves the war, it must share blame with the president if what happens next in Syria goes badly. If Congress rejects the war, it must share blame with the president if Bashar al-Assad gases more Syrian children.

Posner pretty much convinced me that this was politically motivated to force his congressional opponents from being able to have it both ways. Before he asked for Congress to vote, they could have accused him of allowing Assad to do horrible things if President Obama did nothing. If Obama struck, they could blame him for the inevitable suffering to innocent people that the strikes would cause and be able to say that they would have done nothing. Now, Congress has to make a choice with the President. President Obama’s move is politically very savvy, and that, Posner seems to conclude, makes him not worthy of any credit, and, further, casts doubt on whether the strike itself is a good idea.

That’s where I part ways with Posner. I am still excited about the President asking Congress for authorization for the strike. This is exactly what democracy is supposed to do. The President, for political reasons, goes to Congress for something. Members of congress, for political reasons of their own, either support and oppose his action. Journalists write articles about the opposition. Other members of Congress–who are, surprise! politically motivated–have proposed alternative solutions to the President’s cruise missile strike program. Democrats in the Senate proposed the following (from the link):

The Government of Syria must become a signatory to the Chemical Weapons Convention and take concrete steps to comply with the terms and conditions of the Convention;

The failure by the government of Bashar al-Assad to sign and comply with the Convention clearly demonstrates a disregard of international norms on the use of chemical weapons; and

If the Government of Syria does not sign the Convention within 45 [days] after the date of the enactment of this resolution, all elements of national power will be considered by the United States government.

A group of House Democrats have proposed other non-military actions, including international sanctions. Republican Devin Nunes has a proposal that’s basically asking for more details, including estimates of financial costs.

This is what ought to happen before the United States of America decides to initiate military action, even a limited one. One man–or one administration–will not see all sides of an issue, or indeed all potential actions. Even the act of being deliberate and taking time can have benefits, as seen from the recent developments

That’s why Obama asking Congress for authorization is a big deal, and it sets (or continues to set, depending on how you look at it) a precedent that, even if initiated for political reasons, just might stick in future conflicts.

What is the Government Good At, and Why?

I think many people, and specifically, political conservatives, would answer, “nothing at all.” A few weeks ago I argued that conservatives could hold the view (and I think many do) that there are public problems, just no public solutions. This view is philosophically consistent, but I think there’s a difficult question that demonstrates an inconsistency is many conservatives’ view as I’ve outlined it. That question is as follows:

Why is the government good at providing for the public defense and not [insert a program that conservatives hate]?

I take it as a given that most conservatives view the U.S. military as a passable public solution to a public problem. The public problem is that we don’t want other nations (or random people) killing us and taking our stuff. Most conservatives I know think that the military is one (and pretty much the only) area that the Federal Government should not cut precisely because it’s a good public solution to this problem (see this angry conservative over at the Cato Institute–one who actually thinks the military budget should be cut–lambasting Paul Ryan’s proposed 2012 budget for not cutting military spending in any appreciable way). There are conservatives (like that blogger at Cato) who think that the U.S. spends too much on the military; however, I have not found many who think the federal government should stop providing a military.

The question is: Why? Why should the federal government provide this service to its citizens? I can see a few possible conservatives arguments in favor of the military as a public good:

1. It’s in the Constitution. 

This is less of a philosophical point as an appeal to our founding document about the legality of a public armed force. The U.S. Constitution clearly states that the federal government ought to provide for national defense. Therefore, the federal government should do this. Note that this argument is not based on effectiveness, or whether or not the federal government would be a particularly good provider of this public good.

2. If the federal government did not provide a military, its individual citizens would not create a suitable alternative, and would thereby suffer harm.

This justification is all about the results of the federal government providing a military, but note that the quality of the military is not specified. Our military might be terribly ineffective (it isn’t) yet, relative to the counterfactual of an America with no public military, U.S. citizens could be better off. In this defense of our national defense, our military just has to make our citizens better off than they would be with no public defense. That’s not that high of a bar.

I’ll be honest: I can’t think of any more justifications (which says much about the lack of my powers of hypothetical thinking).

Any (non-legal) defense of why the U.S. needs a military leads me to think that a public military must be a solution to a collective action problem that private citizens are really bad at solving, and that is why conservatives believe that the federal government should provide it (and also, of course, because the Constitution explicitly mandates it).

That leaves me with a question for my conservative friends: to what can this justification not be applied, providing that the private market is genuinely not suited to that thing? If the justification I laid out is the reason that we should have a public defense, could that same reason not be applied to federal funding of basic scientific research? Could this not be applied to the government creating marketplaces at which consumers can purchase health insurance without the information asymmetries that plague the individual insurance market (yes, I’m talking about the ACA’s exchanges that open for business in less than a month)?

A person might object: the difference is that the provision of the military does not create individual winners and losers, whereas the funding of basic scientific research and (especially) the ACA create clear individual winners and losers. That is a legitimate criticism, but if you look at how our military is structured, it’s hard not to see how it also creates individual winners and losers (think about the current procurement process, or how the defense industry is one of the wealthiest industries in the country).

But I’m intellectually motivated to defend my preferred criterion of when government should intervene and when it shouldn’t (which is pretty much defense #2). So here’s a shoutout to my friends: what other justifications are there that the military is a vital public service that clearly excludes other public services like healthcare exchanges and basic scientific research (or, it could include those if you support them, but exclude the services you think the government shouldn’t supply).