Thursday, March 28, 2013

Healthy Consumption

The secret to healthy consumption is moderation. If you consume too much of anything it will be bad for you, This includes medicine.

The insurance industry (socialism is insurance run by the state) feeds us the line that we could get more health care if we just pooled our resources.

But, the problem is not a lack of health care. The problem is one of achieving balanced in our consumption of care.

Lobbyists for the health establishment claim that we must pool our resources to achieve an economy of scale. Pooling resources makes the lobbyists rich and powerful, but it does not improve care.

The idea of "economy of scale" only applies to production. It does not apply to consumption.

Supply and demand are not the same thing. Supply and demand have different logical traits. Economy of scale can increase productivity on the supply side, but when we try to scale things up on the consumption end, we end up with with waste and fat.

The secret to healthy consumption is moderation. The claim that we could get more health care by pooling our resources is completely mistaken. Supply and demand are different things. The logic that applies on the supply side does not apply on the demand side.

Interestingly, we see the biggest improvements in productivity in those areas of health care that are not covered by insurance. Notably, LASIK Surgery is not covered by most insurance policies. People must pay for this cosmetic procedure with cash. The ophthalmologists who practice in this area invested personal resources to achieve economy of scale on the production, which dramatically reduced the cost.

I contend that, if we broke up the insurance companies and rejected the fallacy that one can achieve economy of scale on the demand side; then we would see a balanced consumption of care.

Since doctors would be forced to compete for dollars, they would be forced by the market to change their practices to achieve the economy of scale that increases productivity and lowers cost.

Yes, supply and demand are both part of economics. However, the production of goods and the consumption of goods are two different things. The logic that applies to supply does not automatically apply to demand.
The key to productivity is economy of scale. The key to healthy consumption is balance.

The politicos who confuse these basic principles do the world a great disservice.

Now, if you don't mind, I need to go out and get a soda to wash down this cheeseburger.

Insurance v. Assurance

The weak part of ObamaCare is the insurance mandate. The best way to defeat ObamaCare is to come up with an alternative to insurance.

If there was a compelling alternative to insurance on the market, the freedom movement could use it to strike directly at the mandates.

In this regards, I am thrilled to come across a site called 3H-A Health Assurance. This group seeks to develop health assurance as an alternative to health insurance. The site has the achievable of amending PPACA to ...

" ... legislatively amend Obamacare to allow for individuals to exempt themselves from Obamacare by participating in an Individual Health Assurance Account (IHAA)."

The big question for the freedom movement is if this change will be sufficient to strike a blow to Obamacare, or if the concept of "assurance" will be co-opted by the left and turned against the cause of individual liberty.

So, I've been reading web sites on the different between insurance and assurance. Most of the sites are related to Life Insurance. These sites say the same thing. ask wikiins says

"The specific uses of the term "insurance" and "assurance" are sometimes confused. In general, the term insurance refers to providing cover for an event that might happen while assurance is the provision of cover for an event that is certain to happen."

The term is used primarily in the life insurance industry. Death is certain. An accidental insurance policy is designed to pay off only if the death is an accident. With a life assurance policy, one is building up equity in the plan that will pay off regardless.

Of course, the problem in health care is that health expenses are irregular. The only health expense that one is guaranteed to occur is the funeral expense.

In health care, there are companies developing the term "assurance" as a brand. For example Health Assurance, LLC is using Health Assurance as brand for Managed Care. Their siite says:

"Health Assurance, LLC provides a comprehensive managed care program that encompasses primary medical care and dental care services, specialty medical services via a vast referral network, psychiatric and psychosocial services, assistance with impatient referrals, and a comprehensive accreditation program that meets national standards delivered in a cost-effective manner."

3H-Assurance hopes to develop the term along the lines of a Health Savings Account in which people retain control of their money and control the spending of their money. The FAQ at 3H ends with the line: "Health Assurance your money is yours to spend as you choose.  Say 'goodbye' to the hassles of managed care!"

I really like the direction that 3H is taking. It is one of the most positive things I've seen in the freedom movement for the last several years.

My experience is that the enemies of freedom are very good at manipulating terms. Hegelian dialectics is a game in which each term has contradictory meanings. The primary strategy of the Marxian dialectics is to use the tools of a free society to destroy the free society.

The reason that defending the free market is so hard is because adherents of the Hegelian/Marxian dialectic have destroyed our language.

3H is on the right track. I am thrilled to see another group realizing that the way to defend freedom is to develop an alternative to insurance.

For this (or any idea) to succeed, there needs to be a concerted effort to develop the idea in ways to prevent the term from being co-opted and turned into its opposite.

There must be a sufficient support structure to define and defend a free market interpretation of the term "assurance;" otherwise what will happen is the freedom movement will campaign for "Assurance" thinking it is like a Health Savings Account. At the last minute, a group like Health Assurance, LLC will muscle its way in to stuff another managed care plan down our gullet.

A great case in point is the Health Savings Account. Classical Liberals spent a great deal of time developing ideas about free market economics around this term. A politically connect insurance company called United Healthcare Group captured the term and use it as a marketing gimmick for their high deductible insurance policy. The HSA offered by United Healthcare Group is the worst possible implementation of the savings account idea. Companies give their lowest paid workers high deductible insurance and effectively eliminate their access to preventative medicine. All of the work spent developing the idea of a medical savings account was destroyed by insurance companies using Health Savings Accounts to sell high deductible insurance.

3H is on the right track. But, after researching the various usage of the term "assurance," I am skeptical that efforts to parse the terms "insurance" and "assurance" will result in a restoration of health freedom.

It is possible. To succeed in this effort, one would need to create a support structure to defend the definition of terms. This support structure would start by people physically meeting and holding conferences on free market health care reform.

Unfortunately, 3H-A does not include its location on the site.

I am stuck in Utah. For me the best places to hold a meeting are Utah, Las Vegas, Arizona, Colorado, or Idaho. The goal of a meeting is to create an alternative to insurance; so that in the 2014 election freedom advocates could be out on the street demanding a clearly defined mechanism to opt out of PPACA.

The two terms I've been using are "Medical Savings and Loan" and "Health Care Advocates Association™." I am not married to any term. I think HCAA would be a great name to use for organizing a meeting.

Friday, March 22, 2013

Health Coops

Utah was one of the first states to impose a health exchange. Today, the Salt Lake Tribune announced that the Beehive State is one of the first states to impose a "health cooperative" called Arches Health.

The cooperative will start with a $85 million dollar loan from the Federal Government. The cooperative will be given special tax treatment which should give it a competitive advantage over privately owned health care. The company will concentrate on giving care to large politically active groups.

As is typical, the Tribune article by Kirstin Stewart was simply a mush of poorly researched and poorly thought through ideas. For example the article states: "Today's insurers pay doctors for services as provided, a system that rewards volume over value ... Arches will assign patients to medical homes and pay those providers lump sums."

Kirstin has the pricing motive in health care completely backwards. The direct service model is one in which doctors compete for customer's service based on quality. Lumping a whole bunch of people together and paying a lump sum emphasizes quantity.

The health cooperative is just another insurance company. As mentioned in previous posts, I worked for a Utah State owned insurance company. The fact that the company was owned by the government did not change the inherent inefficiencies of the business model. 

The idea behind "health cooperatives" is that the problem in health care is private ownership. The idea is that once we end private ownership, all health care decisions would be made politically dependent on one's group. Political decision will be more equitable than one's made directly by free thinking people.

I started writing a longer piece on why the Arches Health Cooperative is unlikely to improve health care.

Unfortunately, to really understand why health care delivered through a political structure will under perform health care delivered through a system built on individual rights requires a substantive conversation that goes beyond what I can write in a blog post.

The fact that Utah is among the first states to impose the health exchanges and health cooperatives of ObamaCare does not surprise.

I am dismayed, however, that I am unable to find any group within a 700 mile range of Salt Lake that would take an afternoon to engage in a substantive conversation about health care reform.

Friday, March 15, 2013

Planning for a Trip

I have a beautiful presentation on free market health care reform that, if properly presented to the public, might change discourse on health care.

Unfortunately, I live behind the Zion Curtain. The group that controls the state does not tolerate open discourse. The MTC teaches the politicos of this state that they were put on the planet to lecture to others. They were put on earth to lecture and not listen.

Personally, I think that people should spend more time listening than talking.

BTW. My workshop is as follows. I create mathematical models for self-funded care and for group-funded care. I then open the room for discussion about the two different models. It is a basic foundational discussion of financing health care. The reason I begin with a presentation is to create a foundation for a fruitful discussion.

Anyway, Utah has proven a bust. I still think my best hope is to travel to Arizona.

I've already tried this game. Between 2009 and 2010 I racked up close to 10,000 miles traveling to Reno, Phoenix, Denver and Las Vegas hoping to find anyone interested in free market health care reform.

What happened in each case is that I wrote hundreds of emails. Made dozens of phone calls and ended up sitting in a hotel room watching the wallpaper peel off the wall.

I swore to myself that I would not move until I had a firm commitment from someone that they would get a half dozen people in a room and participate in a workshop about free market health care.

A half dozen is six. (That is not a lot of people). In a 700 mile radius of Salt Lake City, I have not been able to find a half dozen people willing to commit to spending an afternoon talking about their freedom.

It is absolutely ridiculous that there is no conservatives or libertarian who is willing to spend an afternoon talking about free market health care.

It is the most important issue of our day. If people are not even willing to spend an afternoon talking about freedom, then they  deserve no freedom.

Even if no one is willing to talk to me, I am still willing to stand up for freedom. So, I am still thinking of hitting the road.

Driving to Phoenix and hosting a meeting will cost about $750.

My experience tells me that no one will show up for any meetings I schedule. Spending $750 to sit in a hotel room to stare at a TV is a complete waste of time and resources.

Now, it just so happens that some of the most beautiful scenery on the planet sits between Salt Lake and the Arizona border. (I just started a tumblr gallery of Moab that I will fill with pretty pictures).

So, I am thinking of driving to Southern Utah to take a bunch of pictures. That way, when no-one shows up for the meeting, I will have something productive to do.

I will be able to spend my time uploading and labeling the pictures. In the last few weeks, I've created numerous tumblr blogs (eg, Utah Color, Arizona Color). These feed into my site

I am adding cool features to ProtoPhoto like a photo blog and mapping resources. If I have the site well optimized, I could offset some of my costs by putting ads on the site. So, in addition to taking photos, I am working on new advertising strategies.

Thursday, March 14, 2013

Another False Dichotomy

The Dialectics in the tradition of Hegel and Marx is a game in which intellectual snits present false dichotomies and paradoxes, then pontificate.

A great example of this game occurs when a political rogue organizes one half of a community against the other half. The paradox is that the community organizer uses unity rhetoric to create deeper division.

Another great example of Hegelian dialectics in action is the upcoming Mansfield Lecture at the University of Montana in Missoula. This lecture is about an imagined conflict between individual rights and social responsibility.

The second one realizes that people own their bodies and that a community is nothing more than a collection of autonomous individuals, then one realizes that this conflict is an illusion. One achieves the goal of social responsibility by helping individuals maximize the use of their individual health resources. 

The event is at a tax funded venue. I suspect that a large number of the lecturers and conference attendees are currently feeding at the public trough.

They will spend a weekend moralizing then walk away feeling self-righteous ... oblivious to the fact that they are the oppressors of the modern age.

The enemies of freedom are organized and well fed at taxpayers' expense. There is little I can do about that.

But, imagine, just for a moment, that a group of people wanting to defend freedom got together and held a conference to support free market health care reform?

The group could expose the false dichotomies created by the oppressive ruling elite and start a new dialogue about the foundations of quality health care.

The conference wouldn't get any taxpayers' money, and would not have access to the same lavish facilities at the Mansfield Conference. But, it is the depth of the ideas and not the luxuriousness of the venue that makes a good conference.

There numerous small venues at the ready for conferences. For example, DaVinci Office says they will rent meeting rooms for $25 to $40 an hour. There are numerous hotels that offer meeting rooms as well.

The hard part is finding people who would sacrifice a whole afternoon to stand up for their freedom. This would involve people doing radical things like telling me. I am stuck in Utah. I am willing to travel and am still thinking of heading to Arizona.

I would do all the work necessary to organize a conference if only I knew there would be a half dozen or so people willing to stand up for liberty.

Sunday, March 10, 2013

Patient Centered Health Care?

I am thrilled that Paul Ryan is keeping up the fight to repeal ObamaCare.

Politicians tend to name their programs the opposite of what they are. The proper name of ObamaCare is PPACA (The Patient Protection and Affordable Care Act).

PPACA is based on RomneyCare as implemented by the Republican Presidential Nominee Mitt Romney. At heart PPACA is a health exchange. The goal of the program is to trade health care on centrally regulated exchanges. The exchanges are implemented at the state level, but regulated at the Federal Level.

The act of centralizing care has the effect of jacking up health care has the effect of increasing health care costs.

This three thousand page bill created a massive bureaucracy. As health care providers bend to accommodate the new bureaucracy, patients become less secure and care becomes more expensive.

PPACA is the exact opposite of the name. This backwards thinking bill made health care less affordable and reduced health security.

PPACA is a bad law and requires fundamental change.

Again, I applaud Paul Ryan for coming up with the catchy phrase that he wants to replace  The Patient Protection and Affordable Care Act with something called Patient Centered Care.

The problem is that until Republicans go through the challenging task of debating health care, any plan they come up with will be as vacuous as PPACA.

For five years, I've had the simple goal of finding a libertarian or conservative group brave enough to sit down for an afternoon to discuss free market health care reform. The debate would challenge the false assumption that insurance companies should be in charge of care.

Unfortunately, until Republicans actually discuss health care, their proposals will be as lame as PPACA. All of the health care schemes that start with the assumption that we must force everyone into insurance will end up as corrupt as ObamaCare.

Sunday, March 3, 2013

Savings and Loan Scandal

My goal is to have a meeting about free market health care reform.

In this meeting I wish to present a model for financing health care in which all of the funds flowed through accounts held by individuals. I supplement the savings accounts with loans and grants.

I then contrast this model with group funded care.

This game of using group funding to manage individual risk has a long and sordid history of turning individual risk into nationwide systemic risk.

I've called my presentation "The Medical Savings and Loan."

A valid criticism of this name is that many people associate the term "Savings and Loan" with the Savings and Loan Crisis of the 1980s and 1990s.

I think this association might be useful.

At heart, the Savings and Loan Crisis was an insurance scandal. The scandal was created by federal entity called the FSLIC (Federal Savings and Loan Insurance Company).

The FSLIC was created by The National Housing Act of 1934 to insure the deposits of local savings and loans.

A Savings and Loan is a small institution engaged in local financing. The problem with local lending is such lending can amplify local financial risks. Imagine that a local business gets in financial trouble. This will lead to big losses at the local bank which freezes up assets through out the community.

The goal of the FSLIC was to nationalize the local risk. The FSLIC assured deposits of local banks and reduced the risk of local financial panic. This created a sense of lending security allowing Savings and Loans to aggressive expand lending.

The sense of stability created by the FSLIC increased borrowing (debt financing) and led to a brief sense of prosperity. This debt financed sense of prosperity started a bubble.

Widespread debt financing of housing actually created inequities. Notably, there has been a big drop in the ratio of a worker's annual salary to the cost of housing. There has been a substantial decrease in lifetime savings and a continuous stream of housing bubbles.

The country was already in trouble well before the S&L scandal. We had inflation followed by stagflation in the 1970s and early 1980s.

When one is at the height of a bubble, one tries to prolong the imagined prosperity of the bubble by loosening lending requirements, which only made things worse.

Rogues in the financial sector realized that they could use the FSLIC to take huge risks with federally insured loans making the collapse of the FSLIC even more dramatic.

People associate the term "Savings and Loan" with scandal. This scandal was not the result of local institutions engaged in financing local projects. The scandal was the result of politicos trying to regulate finances with federal insurance.

IMHO, the Savings and Loan scandal is simply one in a long series of financial scandals.

My goal is to create a discussion about alternatives to insurance. In my opinion, The fact that the name brings up a discussion of the collapse of the FSLIC is a plus because the collapse of the FSLIC is relevant to the discussion of federally regulated health insurance.

Was the collapse of the Savings and Loan industry the result of small companies engaged in local financing, or was it the cause of federal regulations that took the individual risk of local financing and turned it into a systemic risk for the nation?

Since the goal of my effort is to start a discussion, I revel in the fact that the very name of the project brings up an important historical event in the ongoing saga of federal regulation.