Al's Opinions

Today (St. Stephen's Day, 2006) blogger and writer Ezra Klein writes in the Los Angeles Times that the days of our present broken health care system are numbered. The present system is based on providing subsidized health insurance as a perquisite of employment. Employers are beginning to abandon the system because of the rapidly increasing cost of health insurance.

What are the alternatives? Klein lists two models:

1. Extend Medicare to provide coverage for every American. Congressman Pete Stark of California favors this approach.
2. Establish a legal requirement for every person to buy health insurance and require insurance companies to provide plans at reasonable cost. This is the essence of the Massachusetts plan. In addition, Massachusetts provides financial assistance to low income residents who otherwise can not afford health insurance.

Both of these models are institutions that are currently in operation. Medicare has existed since the mid 1960's. The public knows how it operates. It is a popular program. It's good, if not perfect. The Massachusetts plan has only recently begun to operate. It is too early to assess its performance and popularity with the public. I have written elsewhere that I regard the Massachusetts plan as something like a band-aid applied to our existing broken system. It has the advantage or disadvantage, depending on your point of view, of keeping the private insurance industry in the profitable business of supplying health insurance to healthy, young people.

Mr. Klein has a critical view of a plan put forward by the private insurers:

The most compelling evidence that resistance to reform is futile, however, is
coming from the insurers themselves. Cognizant that Congress and the nation are
tiring of the current dystopia, the insurance industry recently released its own
plan for universal healthcare.It's a bad plan, to be sure. Its purpose is more
to preserve the insurance industry's profits than improve healthcare in this
country. But the endorsement of universality as a moral imperative, and the
attempt to get in front of the coming efforts at reform, mark the emergence of a
distinct rear-guard mentality within the insurance industry. Their game is up,
and they're turning some of their attention to shaping their future rather than
betting that they can continue protecting their present.

Mr. Klein mentions three elected officials who propose to support changes in our present health care mess. Pete Stark, a Representative from California and probably the new Chairman of the Health Subcommittee, favors a "Medicare for all" solution. Senator Ron Wyden of Oregon has assembled a coalition of "union leaders and corporate chief executives" to put together a plan similar to the Massachusetts plan that would rely on existing private insurance companies to provide health insurance. Governor Arnold Schwarzenegger of California recently vetoed a bill passed by the State Legislature that would have established universal health insurance as the plan for California. However, he now says that he wants to work with the Legislature and others to create a universal health care plan for the State.

Mr. Klein sees the acceptance of the failure of the present system as a hopeful sign. There is recognition of the need for health care to be universally available to all regardless of income. One way or another, he feels, we will find our way to something that is better than what we now have. It will be better in that it will be less expensive and will provide better care for everyone. We Americans spend more per person on health care than any other nation on earth, but the results of our system measured in life expectancy and infant mortality are rather poor in comparison with the results in other industrial nations.

I am not as optimistic as Mr. Klein. Big Pharma and big Insurance are too big and too profitable to succumb without a terrific struggle. We saw what they could do in 1994 when they defeated President Clinton's attempt to achieve universal health care. It may be that, for the time being, we will have to be content with a plan like that of Massachusetts that keeps big Pharma and big Insurance as profitable entities. Governor Schwarzenegger, for example, has slhown his disdain for the Medicare or the Canadian models because they both involve a change of funding from private insurance premiums to public taxes. The fact that most individuals will have actually less out-of-pocket expenses under a Medicare or Canadian type of system than at present doesn't convince either him or his hard-line Republican allies that the change should be accepted.

Labels: Massachusetts plan, Pete Stark, Ron Wyden, Schwarzenegger, Universal health care

Goodwin Liu writes today in The Los Angeles Times that "The 1954 [Supreme Court] opinion did not establish colorblindness as a legal principle. There is no ambiguity to be decided in the high court's current cases." He goes on to comment about a seeming change in the Court's view about the case "Brown vs. Board of Education," which declared that segregating school children on the basis of race was unconstitutional. The logic of Brown has been extended to outlawing segregation in all public accommodations, including transportation and dining in restaurants. Mr. Liu argues that in no case since Brown has the Court asserted that the federal Constitution is colorblind.

Segregation can be brought about as a result of zoning regulations and the failure of government to enforce equal opportunity housing laws as well as by deliberate positive action of government to legislate separate facilities for "white" and "non-white" races. Because such segregation came about by government decisions not to enforce fair housing laws, it is just as much a consequence of government policy as deliberately segregated schools had been.

At least that's an argument that works for me.

Some communities and some institutions have set out on their own to eliminate the effects of past segregation and discrimination. What is disturbing is that the present Supreme Court seems set to strike down these efforts on the ground that they deliberately take into account the color or the race of individuals in granting admission to prestigious universities. It isn't at all clear to me how you can go about trying to correct for effects of past segregation without looking at race and skin color. If the Court chooses to outlaw these voluntary attempts (e.g., at the University of Michigan Law School and in the Seattle Public Schools) it will be going against the spirit of the Brown decision. It will be condoning, if not actually encouraging, a return to segregation and discrimination.

Labels: Brown v. Board of Education, Goodwin Liu, School integration, Seattle Public Schools, U. of Michigan Law School

Richard Epstein, writing in the Los Angeles Times today (December 22, 2006) writes under the title The myth of the big bad drug companies that: "They're not greedy, they're over-regulated. The result is fewer pills to cure our ills."

He goes on to write :

THE PHARMACEUTICAL industry is getting bad press. Recent books by Marcia Angell, the former editor of the New England Journal of Medicine, and Jerome Kassirer, another former editor of the journal, have harshly condemned the industry for recklessness, insensitivity and all-consuming greed. They gain sales by spicing up their titles with inflammatory phrases about "deception," "complicity" and how drug companies "endanger your health."

He points out the following constraints under which pharmaceutical firms operate:

1. Rather than "heartless, avaricious behemoths that act in whatever manner they choose and always get their way, drug companies are too heavily regulated." They operate "in a hostile and excessive regulatory environment that frustrates sound business decision-making and keeps down pharmaceutical company share prices in the stock market."
2. "Ever-tougher conflict-of-interest rules in the National Institutes of Health and such academic medical centers as the University of Pennsylvania, Stanford and Yale have reduced opportunities for fruitful collaboration between industry, government and universities."
3. In addition, "the industry faces major liability risks. Consumer fraud legislation adopted in many states has generated massive, often eye-popping claims for refunds of the original purchase price — in some cases even for drugs that have worked as promised or on the part of people who have not taken the drugs at all."
4. "Regulatory attacks on the industry's pricing model, including recent proposals to have the government negotiate rates for all senior citizens covered under Medicare Part D, threaten its revenue stream."

He continues by pointing out the expense of developing a new drug and raised the question of who pays for the development costs? He argues that price controls, or "even talk of price controls" discourages pharmaceutical companies from the investment needed to develop new drugs. He contrasts two strategies: (a) avoid regulation and encourage new companies to enter the business; (b) imposing price controls. He writes that the second strategy leads to lower prices now but fewer new drugs in the future. The first strategy leads to higher prices for new drugs but a more plentiful supply and variety of drugs later on.

By now you must realize that I have a rather strong reaction to this article or I wouldn't bother to be writing this post about it. My reaction is that it is a typical conservative attempt to salvage an existing system of drug development and distribution by applying palliatives and band-aids. I ask, why should drug companies be required to make heavy investments in the development of new drugs and other medications that are of great benefit to the public? Instead of requiring the first users of these medications to pay, why not let everyone pay? Why not let government laboratories develop the drugs and then license their manufacture by private firms?

A problem with our present system of developing and distribution new drugs that Mr. Epstein doesn't mention is that drug companies are motivated to develop drugs that they believe they can sell in large quantities, such as Viagra and Cialis and other cures for erectile disfunction, rather than drugs that can save lives by treating serious but uncommon ailments. Big Pharma may not be heartless but it knows where the money is.

My suggestion to have government laboratories develop and license new drugs is not intended to try to replace the present system of private investment. Let Big Pharma keep its Viagra. Let government or other publicly funded non-profit laboratories develop drugs for serious medical problems where there isn't a lot of profit available.

RICHARD A. EPSTEIN is a professor of law at the University of Chicago and a senior fellow at the Hoover Institution who has often consulted for the pharmaceutical industry.

Labels: Big Pharma, Drug prices, erectile disfunction, regulation

There seems to be an uncertainty principle that governs the extent to which a supposedly democratic regime is truly democratic. In one extreme, decisions are made by the entire body of citizens, voting either in mass meetings or on initiatives and referenda. Such a system is slow and cumbersome. In addition, decisions made in this way are often not wise or carefully thought out, but represent sudden impulses of the public in reaction to some rather spectacular news event or condition. California provides many examples of propositions passed by large majorities that were later found to be poorly written or to put in place bad policies.

In another extreme, decisions are made by individuals and groups chosen indirectly. The American Presidency is a good example. The people elect "wise" electors who then use their wisdom to choose a President who serves for four years. At least, that's what the founding fathers thought they were creating. Even with Presidential Primary elections and nominating conventions, the process of electing a President is indirect. Once elected and inaugurated, the President is given the power to make decisions with very little accountability except that he (or she, in some countries) must obtain the authority of the elected legislature to spend any money to carry out his decisions.

The problem with a Presidential system, such as the one we have here in the United States, or with a Parliamentary system, such as the one in place in many other countries, is the power that is granted to the leader (President or Prime Minister) to make decisions without regard to public support of those decisions. Of course, in a Parliamentary system, lack of public support often leads to lack of support in the Parliament, and an unpopular or incompetent Prime Minister can be easily removed from office. In the case of an unpopular or incompetent President, it may be necessary to put up with him until the end of his term of office. In some countries, however, for example, Ecuador, an unpopular or corrupt or incompetent President can be removed from office by public mass demonstrations against him.

In this respect, I believe that Ecuador is closer to the democratic ideal than the United States.

The object of having a President with power is the expectation that the incumbent will use the powers of the office to promote and carry out policies and programs that benefit the nation. The President's decisions should be based on good and wise counsel given by advisors and elected officials. They should not be based on his whim or his ideological belief in the way things should be, as opposed to the way they are.

The American Presidency was modeled after the British government at the time of Henry VIII and Elizabeth I. The monarch could declare and wage war. The monarch could seize private property, as Henry did with much of the property of the Roman Catholic Church. Monarchs like Henry and Elizabeth knew that it was necessary to maintain public support. Unpopular monarchs had been removed by revolutions and by assassinations.

A fabulous example in history of a bull-headed monarch is provided by one of the Saxon kings: Ethelred the Unready. The word "unready" in Old English meant "unadvised," that is, "bull-headed" or "rash." Ethelred was eventually deposed.

We have today an example of an "unready" or "unadvised" monarch (i.e., President). Perhaps the word "ill-advised" fits better. He has led this nation into a horrible situation in Iraq from which there is no good way out. We're like Bre'r Rabbit in the story of the Tar Baby. However, there's no hungry but easily duped Bre'r Fox standing by to separate us from the sticky mess and throw us into the safety of the briar patch.

To get back to my original point, a President or King or Prime Minister who makes decisions without regard to their popularity or their long-range effect on the people is not acting to promote democracy. The American People want our country to escape from the quagmire of Iraq, but George the Unready plans only to become even more involved in that country.

Labels: Ethelred the Unready, Henry VIII, Iraq, limitations of democracy, Removal of unpopular leaders

There are two thoughts going the rounds among political leaders and pundits these days that I strongly disagree with. One of them is the notion of creating a "surge" in our military investment in Iraq. The other is that the most knowledgeable and experienced foreign policy experts have managed to allow our President to get us into an impossible situation in Iraq.

The first notion, the surge, would involve about 20,000 additional troops. According to the advocates the additional troops would enable us to pacify Baghdad and enable the Iraq government to control the entire city, not just the Green Zone. Following that accomplishment our military forces in Iraq could be gradually withdrawn while the Iraq government gains control of the whole country. It sounds great. It sounds as great as the notion, five years ago, that invading Iraq and replacing Saddam Hussein would be a cake-walk and that the people of Iraq would welcome us with flowers and other goodies and be eternally grateful to us for getting rid of their vile dictator. In fact, many of the people floating the surge tactic are the same ones who assured us that conquering Iraq would be a "piece of cake."

Twenty thousand is not a realistic number for the additional force needed to pacify Baghdad. Baghdad is one of the large cities of the world. The population is somewhere in the neighborhood of five to seven million. The violence there is not like the violence in some of our own cities due to turf wars between street gangs. The violence there is based on religious fear and hatred. Sunni and Shia Muslims are killing each other. If our "surge" of 20,000 troops were to vanquish the Mahdi Army and the Badr Brigade, two Shia gangs responsible for at least half the violence, they would be replaced by other gangs, recruited either from residents of Baghdad or from zealots from the hinterland. I believe that a more realistic number is two hundred thousand additional American troops. We don't have them at present and we can't get them soon enough to have any effect.

The other notion is that the Bush Administration contains some of the most experienced and knowledgeable persons this country has with regard to foreign policy. This Administration of foreign policy experts as led us into an unwinnable war in Iraq and into a situation with only bad options. We can stay (bad) or we can leave (bad). We can try to train an Iraqi Army in the middle of a religious civil war (almost impossible). How did such wise people manage to get us into this mess?

I was thinking about this conundrum for a while when I realized that these were some of the same people who got us involved in the civil war in Nicaragua, who helped overthrow the democratic government of Chile and install the brutal autocrat Augusto Pinochet, and other actions that turned out badly. I am reminded of a comment a friend once made about doctors. A certain doctor had been in business for twenty-five years and claimed to have had "25 years of experience." My friend snorted that the doctor in question had had "one year of experience and 24 years of practice." Our current foreign policy leaders and experts have had many years of practice in the administrations of Reagan and the two Bushes. They seem to have learned little from experience.

Conservative pundits have objected to the Iraq Study Group report as not showing a path to victory. They argue that victory is possible and that the policy of the government should be to achieve that victory. I think they are half right.

They are right (that is, I agree with them) in saying that victory is possible. Of course it's possible. All that is needed is an army large enough and equipped to outnumber and overpower the militias that are now carrying on a somewhat disorganized civil war. I'm not a military expert, but my guess is that it would take an army of at least half a million men. We now have 140,000 men in Iraq, with sufficient trained reserves waiting to replace them and give them time to rest, recuperate, and retrain.

What I don't agree with is that the United States has at present the ability, let alone the determination, to do what is necessary to win. To raise the army that I believe is needed, the government would have to reintroduce the draft. Taxes would have to be raised to pay for the cost of the extra men and equipment needed. The American Public is not ready to accept a draft. The Bush Administration is not ready to admit that additional taxes are necessary to pay for the effort of winning.

Almost everyone else knows that the Iraq Study Group report is intended to give our petulant and stubborn President a means of getting us out of the Iraq quagmire without losing face. He has known the Bush family well for many years and led the group to prepare a unanimous report to give George W. Bush cover for changing his policy and his stated goals for Iraq. If Mr. Bush has any common sense, he will embrace the report and follow its recommendations. He can do what Richard Nixon did with Viet Nam thirty years ago: declare victory and leave.