Thursday, May 27, 2010

Sunday, May 23, 2010

Did the Wall Street Journal editors get duped, or is Scott Gottlieb just a health industry shill? Scott Gottlieb, an AEI fellow and practicing internists wrote a May 18 WSJ op-ed, that is either an earnest, hard-hitting criticism of Obamacare and its unintended consequences, or a sly praise of the new health reform:
[I]nsurers are being blocked from raising premiums—for now by political jawboning, but the threat of legislative restrictions looms.

One of the few remaining ways to manage expenses is to reduce the actual cost of the products. To implement this strategy, companies need to be able to exert more control over doctors.

So insurers are trying to buy up medical clinics and doctor practices. Where they can't own providers outright, they'll maintain smaller "networks" of physicians that they will contract with so they can manage doctors more closely. That means even fewer choices for beneficiaries. Insurers hope that owning providers will enable health policies to offset the cost of the new regulations.

Doctors, meanwhile, are selling their practices to local hospitals. In 2005, doctors owned more than two-thirds of all medical practices. By next year, more than 60% of physicians will be salaried employees.


The bottom line: Defensive business arrangements designed to blunt Obamacare's economic impacts will mean less patient choice.

It sounds like havoc is being wreaked on the industry. But wait, wasn't Obamacare supposed to "bend the curve" and make health care cheaper for consumers? And is reduced choice caused by vertical integration really going to be all that bad? Aren't the Mayo Clinic and Kaiser Permanente, which have great customer satisfaction and medical outcomes, already vertically integrated, and arguably successful precisely because they are vertically integrated? From the Economist:
KP’s business model integrates fixed-price health insurance with treatment at its own hospitals and clinics. This has led to big efficiency gains, making KP one of the cheapest health-care providers in most of the regional markets in which it competes.... Moreover, KP’s medical results are as good as its financial ones. By many clinical measurements, it is the best-performing health-care outfit in the regions it covers.
I think the Economist article also answers my initial question. Gottlieb is not trying to stealthfully praise the Democrat's health care reform. He's just whining on behalf of doctors all across America:
The prevailing culture of health care in the country is difficult to overcome. Some American patients, used to having all the scans and consultations with exotic specialists they want, costs be damned, do not like KP’s frugal ways. By the same token, some freewheeling American doctors do not like KP’s rigid systems or fixed (albeit generous) salaries.
There are many problems with the health care reform bill. It is filled with lots of nasty surprises (e.g., the 1099 mess). It's combination of high subsidies for individual insurance and low penalties for employers failing to provide health insurance loom as a potential fiscal disaster. It forces insurers to charge young people too much and old people too little, as compared to actuarially fair prices. This, combined with tiny penalties for not purchasing health insurance, and combined with the requirement of guaranteed issue, will create a huge adverse selection problem.

I could go on listing more faults, but the idea that the private health care industry might actually be made more efficient, and soon, is a very pleasant surprise. If you think, like I do, that we spend too much on health care in the US, then one of the less intrusive ways for the government to bring down costs is to simply set an industry-wide ceiling on the growth rate of per-capita health care costs, and let private industry figure how to still make a profit.

How might I be wrong in seeing a silver lining here? First, it could be that health care providers and insurers ultimately will cut costs not by becoming more like KP (which is actually earninga big profit, despite being a non-profit organization), but by crude forms of rationing that leave the population significantly less healthy, thereby actually making the industry less efficient. Or perhaps they'll fail to cut costs quickly enough, and instead they'll go bankrupt, leading to an emergency British-style nationalization of health care. Or, costs might be cut, but not enough to keep current levels of medical innovation profitable, such that our children and grandchildren will die younger than they would have otherwise.

Saturday, May 15, 2010

When people ask me what set theory is about, I usually tell them that it starts with the idea that there are different levels of infinity. It's a great one-liner.

Here's Steven Strogatz fleshing out the idea with a friendly exposition of the Hilbert Hotel and Cantor's Paradox.

Friday, May 14, 2010

Borges, from a 1976 interview:
In that case, if arguments convince nobody, a man may be convinced by parables or fables or what? Or fictions. Those are far more convincing than the syllogism — and they are, I suppose. Well, of course, when I think of something in terms of Jesus Christ. As far as I remember, he never used arguments; he used style, he used certain metaphors. It’s very strange — yes, and he always used very striking sentences. He would not say, I don’t come to bring peace but war — “I do not come to bring peace but a sword.” The Christ, he thought in parables. Well, according to — I think that it was Blake who said that a man should be — I mean, if he is a Christian — should be not only just but he should be intelligent ... he should also be an artist, since Christ had been teaching art through his own way of preaching, because every one of the sentences of Christ, if not every single utterance of Christ, has a literary value, and may be thought of as a metaphor or as a parable.
Tough choices for California: The Governator proposes eliminating welfare-to-work program, reducing state subsidies for in-home care for elderly, reducing state subsidies for child care (i.e., day care), 5% pay cut for all state employees, 5% pension plan contribution increase, and more...

Just wait about 15 years. This will happen at the federal level. I don't just mean proposals. Those are starting to be made already---see Sen. Ryan (WI-R). I mean proposals enacted: the retirement age will certainly be at least 70 for people my age (born in 1983). Federal employees will probably get across-the-board salary cuts. Oh, and taxes will certainly be increased for us all. Moreover, p(VAT)>.5.

Friday, May 07, 2010

I complained about Ubuntu 10 on my desktop, so I feel I should mention that I continue to be extremely pleased with Ubuntu Netbook Remix 9.10 on my new Acer. Everything just works. (The Acer came with Windows 7, but I never use it, never miss it, and will erase it if I ever need the disk space.)
Still on the topic of offshore drilling, I see that those responsible for the recent spill are looking at a bill of a few billion dollars. The line that must be quoted: "The flood of lawyers to Florida is probably equal to the flood of oil coming to the coast."

Wednesday, May 05, 2010

The utilitarian case for offshore drilling.
Hahn and Passell note that even at the highest social cost of carbon at $321 per ton suggested by British economist Nicholas Stern, the [net] total benefits of producing offshore oil are still positive.
And by "positive," they mean hundreds of billions of dollars. Read the whole thing for a more detailed breakdown of costs and benefits.

Saturday, May 01, 2010

Ubuntu 10.04

I was content with 9.10. Why, oh why, did I upgrade?

The video cards for my three-headed machine are two Radeon 7000s and nVidia GeForce 6150SE. The screenshot is from a monitor attached to one of my Radeons. I of course googled to find that I'm not the only one with such video cards having problems with 10.04.