Al's Opinions

Many people think of health insurance as though it is similar to insurance on a home, a car, or a business. To achieve a large pool of participants so that an occasional big loss by one requires only a slight increase in the premiums of the others, it is either customary or legally required that everyone who owns and drives a car or who owns a home or business have insurance coverage. That's what insurance is all about: sharing the risk of a disaster.

Health insurance is different. With health insurance, the participant doesn't want an arbitrary cap on the maximum payout. A person doesn't think of his health and life in the same way as he thinks of his house or his car. If the car is totaled, the insurance company will pay the cost of a replacement. The replacement is not a new car; it is another car of the same make and age and condition as the one lost. The same rule applies to a house. In fact, a house is never insured for its full replacement cost; to do so would tempt the owner to destroy his house to collect the insurance if he was having difficulty selling it for the insured value. A participant with health insurance wants the cost of even the most expensive medical procedure paid by the insurance company. If he needs a $500,000 liver transplant he isn't interested in a policy that covers only the first $100,000 of the cost. He wants one that covers the total cost, less a reasonable co-payment.

From the insurer's point of view, the problem with health insurance is that a cap on the maximum pay-out is unacceptable to most subscribers. In self defense, the insurer has to insert the cap in the policy, making sure that it is in the very fine print that the buyer won't notice. It's a way of being able to sell policies with low or competitive premiums and still stay solvent in case a subscriber has a medical problem requiring an astronomical sum of money.

This line of thinking leads me to conclude that the only way to provide real health insurance is for the U.S. government to stand behind the organization that pays the claims. The payer does not have to worry about making a profit each quarter. The payer doesn't have to worry about being wiped out by an extraordinarily large claim. In other words, the solution is a "single-payer" insurance system. To provide the largest pool possible, single-payer covers everyone, including felons in prison and immigrants without papers. Covering the entire population also reduces the likelihood of epidemics of serious diseases, such as smallpox, since everyone will be treated at the first indication of illness.

Since single-payer gets rid of the high overhead costs of private for-profit insurance firms (by getting the firms out of the business altogether), it can and should provide good medical care at a lower cost than our present hodge-podge system of private insurers, self-insurers, and the like. Single-payer by itself will not rein in the escalation or inflation in the cost of health care. That rising cost will have to be covered by changing the way doctors practice medicine. Doctors working on salary at the Mayo Clinic in Minnesota, for example, provide excellent medical care at a cost far less than the same doctors and other providers would charge if they were each operating as a private for-profit busines, with individual malpractice insurance, office staff, and other overhead costs. We need a change from private fee-for-service medicine to cooperative clinical medicine.

Labels: covering illegal residents, high overhead of private insurers, Mayo Clinic, single-payer, Universal health care

Unlike yesterday's post, this one is about politics and public opinion. Two items in the news this morning got my juices going. The first is that the White House is giving up on the "public option" non-profit health insurance plan. Instead, the White House will support the "cooperative" plant - whatever that is. The other item is taken from the editorial pages of the Los Angeles Times and reads as follows:

Making basic healthcare services available to those who cannot afford them is a worthy goal. If the currently proposed healthcare reform addressed only that issue, we would not be having the contentious debate currently in evidence.

Reforming the system incrementally is not a bad idea; why not try it?

Oh, yes. There was a third item. Following the White House statement about the public option, stock prices of the big health insurance companies rose smartly.

My response to the writer of the letter to the editor is that reforming the system incrementally is extremely expensive. The objective of the reform is twofold: (1) provide health care to all, not just those with enough money to pay or to buy insurance; (2) get a handle on the increasing cost of the present health care system that doesn't cover everyone. Both of these objectives have to be met, one way or another. If, through inaction, one objective has to be sacrificed, it will be the first. The increasing cost will stop when only the rich can afford health care at all at the rate of increase we experience at present.

The writer is wrong in implicitly assuming that part of our health care system works well. Not so! The part that works works badly and needs reform just as much as reform is needed to provide health care for the poor and lower middle class. In the present system, no component of it has an incentive to control or restrain costs. The providers are looking a payers with deep pockets: medicare and big insurance firms. They have no incentive to practice good medicine economically. The insurance companies have little incentive to restrain cost increases other than denying coverage for certain very expensive procedures. Increases in the cost of conventional health care procedures can be passed on to the policy holders in the form of increased premiums. For political reasons, Medicare is not allowed to restrain cost increases by negotiating prices for prescriptions or by urging medical providers to operate more efficiently.

In short, the whole system needs to be reformed. The White House is wrong in deferring to the demands of the insurance lobby to drop support for the "public option."

Labels: futility of partial reform, Health care reform, Insurance lobby

This rant isn't about politics, health care, religion, or the pains and lonliness of old age. It's a subject that's annoyed me for many years. It's about the way some people on radio and TV pronounce certain words.

Let me state here my own prejudices about pronouncing the words of my language. I grew up in Michigan and I was taught that names of my own state and of many cities near by that were spelled in the French manner were to be pronounced with the "ch" combination as though it were written "sh." Thus, Michigan - Mishigan; Chicago - Shicago; Cheyboygan - Sheboygan. And so on. Another thing I was taught was that words like palm, balm, Palmer, and so on, were to be perfect rhymes or homonyms with bomb, bomber, etc. That is, the "l" was not pr0nounced but was used as an indicator that the "a" had the sound of a in "father" or "far." A third thing I was taught about pronunciation was that the "wh" at the beginning of a word was to be pronounced as if written "hw" and that word pairs like whale - wail, what - watt, why - wye, when - wen, where - wear, and whoa - woe were to be distinguished in pronunciation.

I have noticed lately that most radio announcers pronounce the name of my native state as if it were "Mitchigan." Chicago becomes "Tchicago." These mispronunciations are clearly wrong. There is no dialect of American English that allows such pronunciations. It is also clearly wrong to insert a pronounced "l" in words like Palm Springs, Palmer, balm, and the like. Historically, these are words borrowed into the language from French some time after the defeat of the English at Hastings in 1066. The "l" sound wasn't pronounced in French.

The third category, the replacement of wh- by w- in pronunciation does exist in many dialects of English. Not in mine, however. No matter how much my daughters tease me about my insistence that whale and wail are not homonyms, I will stick to the pronunciation I learned as a child.

I have one other odd pronunciation. In the part of Michigan where I grew up, the word "creek" was pronounced as if written "crick." I've noticed a similar pronunciation among a few friends, one from Wisconsin and one from Seattle. It seems that the pronunciation occurs in certain areas. My Wisconsin friend comes from western Wisconsin, near Racine. His wife comes from the eastern part of the state and her pronunciation is "creek."

Labels: dialects of English, mispronunciation by radio announcers

We Americans take our religious convictions seriously. The "swift boat" group that's trying to derail President Obama's efforts to reform and improve our health care system is using religion as one of its tools against reform. Abortion is a big issue among many Christians, including Catholics and many Protestants. The reformed health care system would use taxpayer dollars to pay for optional abortions. Another issue is euthanasia or assisted suicide. In the reformed system Medicare would provide free counseling about death. The fear is that taxpayer dollars would be used to persuade old people to commit suicide to save the high cost of care required during the last year of life.

I can't resist adding some silliness to these arguments. If they were numerous enough to form a significant voting bloc, Jehovah's Witnesses would be targeted with advertisements that would point out that the reformed system would pay for blood transfusions and other organ transplants with their tax dollars. Mormons would be told that the meals served in hospitals and other medical care facilities would include coffee. Muslims would be told that the meals would include pork. Orthodox Jews would be told that they would include lobster, clam, and rabbit, along with pork.

I can speak to the euthanasia argument from personal experience. During the last few months of her life, we had home hospice care for my late wife. The care included nurses who came almost every day to assess her condition, instructions to my daughter and to the hired caregiver about pain medication, and counseling for me, the presumable survivor of the sad event we would soon experience. There was no extra charge to me for the hospice care. It was recommended by Kaiser Permanente, where my wife and I received our medical care. I can only conclude that Medicare pays for the hospice care. The hospice service included a counselor who counseled me about life after the death of my wife. I expect that after the health care system reform is in place, Medicare will still pay for hospice care (in place of much more expensive hospital care) and counseling. At least I sincerely hope so.

If Catholics and Baptists want to forgo abortions, let them. If Jehovah's Witnesses want to forgo blood transfusions and other organ transplants, let them. If Mormons want to forgo beer and coffee, let them. If Muslims want to forgo wine and pork, let them. If Orthodox Jews want to forgo clam and lobster, let them. But let them not impose their religious taboos on me and other Americans.

Labels: abortion, euthanasia, Health care reform, religious taboos

The public is not fairly represented in our State legislature. Each Senator or Assembly Person is elected from a district on the basis of "winner takes all" election rules. At the general election voters of a district have a choice among a Democrat, a Republican, a Libertarian, a Peace & Freedom, a Green, and an American Independent. The winner will be either the Democrat or the Republican. Voters with all the other preferences will not be represented by the winner. If the winner is a Democrat, he or she will not represent the Republicans; if a Republican, the Democrats will not be represented. As a result of having single-member districts, nearly half of the people in the State will not be represented by their elected representatives.

A consequence of this underrepresentation is voter apathy. If the district almost always elects a Democrat, the Republicans will not take much interest in elections, except to grouse about the winning Democratic candidate. If the district is "safe" for Republicans, the Democrats will not take much interest in elections. The voter turn-out in "safe" districts may be low, with only a small percentage of the eligible voters showing up at the polls on election day. This apathy may not affect the outcome of the election for the legislator but it can affect the outcome of the state-wide election for governor. Low turn-out for the legislator usually means low turn-out for the governor. In a close election, a governor candidate may lose because the turn-out in districts that are "safe" for his or her party is lower than in competitive districts.

I have some different ideas about electing representatives to a legislature. They're not my own ideas, but I have them anyway. Two of them are: (1) elect members from districts in which several candidates are elected; (2) do away with primary elections and use instant-runoff counting in general elections. I do not think these are radical ideas. Such voting schemes are used in many countries, particularly in countries that were never former British colonies. In former British colonies - Canada, United States, Australia, South Africa, etc. - legislators are elected from single-member districts. In many European countries, all or some of the legislators are elected from multiple member districts. The objective is to achieve proportional represenation in the legislature, so that Greens can elect five percent of the members if they constitute five percent of the voters, and so on. In the United States and Canada it is highly improbable that any minority party candidate can ever be elected to a legislature. The voting system is designed so that only candidates of the two major parties can be elected.

I won't bore you with details of how to conduct instant-runoff elections. I suggest you consult Google or some other good search engine for references.

Labels: instant run-off elections, multiple member districts, voter apathy

A Los Angeles talk show host (Larry Mantel of KPCC) is promoting the idea of a constitutional convention for California to solve the problems that make the State ungovernable and lead to yearly deadlocks on the budget. I oppose the idea. I don't think it's possible to solve the problems in California with a single convention to draft a new constitution for the State.

Why is the State ungovernable? One important reason is the requirement for a 2/3 vote in each house of the legislature to pass a budget or to amend the tax code. We don't need a constitutional convention to change the 2/3 requirement to a simple majority. A simple majority is the rule in most of the other States. We can change it by initiative. Don't expect the legislature itself to draft a proposition to do away with the 2/3 vote. A constitutional amendment also requires a 2/3 vote in the legislature. The minority party very much wants to keep the 2/3 requirement in place.

There is the question of whether the voters would approve a change from 2/3 to majority voting in the legislature. I think a majority favors such a change. However, the minority in favor of keeping the 2/3 vote is very passionate and is willing to spend a lot of money to scare the public into keeping the requirement. You can expect to see ads with arguments like these:

• If you let a simple majority in the legislature raise taxes, they will. You'll pay more taxes if this change is made.
• This requirement forces legislators to think in terms of how to reduce the cost of government to fit within the available tax revenue, rather than think of how to spend more of your money.
• This requirement also prevents the majority from shutting out the minority in planning the budget. The Republicans are the minority party now, but the Democrats could be the minority party a few years from now.

These are plausible arguments. Those of us who favor a simple majority vote in the legislature for budgets and taxes will have to prepare good arguments against them. In any event, we should study how other States enact budgets and taxes and see whether in practice any of the warnings of the "status quo" faction have any merit in actual experience.

Another necessary but more difficult change is to modify the property tax rules of Proposition 13. Many home owners are naturally nervous at the possibility of a big increase in the property tax on their homes. In my case, Proposition 13 limits the tax on my home to about $1700 a year. If it were taxed at the rate of 2 percent of its market value, the tax would increase to at least $10,000 a year. This extra revenue would be a boon to the City of Los Angeles, struggling now with a structural deficit of over a billion dollars a year. I have enough income to pay the extra tax, so I have no fear of being dispossessed by the marshal. There are many retired persons in less fortunate financial situations than mine who would have to go in debt, probably by taking out reverse mortgages on their homes, to pay the tax. They would stay in their homes and survive, but their heirs would not inherit the houses. The banks would repossess them and sell them to collect the amounts owed on the mortgages.

I don't think a simple repeal of Proposition 13 is politically possible. It may be possible to amend the proposition such that commercial property - property that produces income for the owner - is taxed at a higher rate than residential property. This change would not, or should not, alarm the retired homeowner with a modest retirement income. There would be powerful resistance to such a change, mostly from landlords. The Howard Jarvis Taxpayers Association would go full bore in putting out ads and sound bites to scare the retirees. The purpose of the change would be misrepresented. Persons who live in rented houses and apartments would be told how much their rents would have to be increased to cover the change in the tax rate. Perhaps rental property would have to be left out of the proposed change, so that only property supporting a manufacturing or service business (e.g., Macy's, Boeing Aircraft) would pay the increased tax.

Another problem that promotes the ungovernability of California is the extreme partisan divide in the legislature. Members have to face voters at a primary election before they can campaign in the general election. Primary election voters tend to be ideological purists. They want their candidates to be as pure as they are. Mr. Schwarzenegger thinks this partisan divide can be diminished by changing the way legislative boundaries are drawn, so that districts contain a more even mix of Republicans and Democrats. In that way, the winner of the primary in a "safe" district would not be guaranteed election in the general election. The voters approved this change and it will go into effect after the 2010 Census, when State Assembly and Senate Districts are redrawn. My own view is that it won't have much effect on the extreme partisanship.

I have an idea for an election system that would reduce the effect of the extreme partisan ship. I will have to think about it for a while and present it in another post.

Labels: 2/3 vote requirement for budget, California budget, Governor Schwarzenegger, Proposition 13, ungovernable California