The Cincinnati Blog has a hilarious exchange in the comments to this post.

Another Argument For Universal Healthcare

On September 9 Wizard pointed out this gem from the LA Times:

"As Ford Motor Co.'s new chief executive, Alan Mulally is staring down a long road as he seeks to turn around the ailing auto giant. But two weeks into the job, he'll be able to bank the lion's share of the $20.5 million he will receive in the first year.

That amounts to $56,164.38 for each day of the year. "

Now we hear that Mulally plans to step up the pace of the inevitable layoffs, buyouts and plant closures. That sounds reasonable. When business is bad, cut your overhead costs until you're profitable again. Problem is, this strategy might have exactly the opposite effect.

In an interesting article in The New Yorker, Malcolm Gladwell describes the "dependency ratio" and how it can sink a company like GM or Ford while miraculously lifting Ireland's economic fortunes.

Simply put, the dependency ratio compares the number of active wage earners against pensioners. The more the balance shifts in favor of pensioners, the greater a company, or country, or family's liability becomes relative to its ability to fund that liability. Bethlehem Steel is a case in point:

"But Big Steel didn’t get bigger. It got smaller. Imports began to take a larger and larger share of the American steel market. The growing use of aluminum, concrete, and plastic cut deeply into the demand for steel. And the steelmaking process changed... As a result, steelmakers like Bethlehem were no longer hiring young workers to replace the people who retired. They were laying people off by the thousands. But every time they laid off another employee they turned a money-making steelworker into a money-losing retiree—and their dependency ratio got a little worse. According to Reutter, Bethlehem had a hundred and sixty-four thousand workers in 1957. By the mid-to-late-nineteen-eighties, it was down to thirty-five thousand workers, and employment at Sparrows Point had fallen to seventy-nine hundred. In 2001, Bethlehem, just shy of its hundredth birthday, declared bankruptcy. It had twelve thousand active employees and ninety thousand retirees and their spouses drawing benefits. It had reached what might be a record-setting dependency ratio of 7.5 pensioners for every worker."

This conundrum, and Gladwell's article, make a good case for nationalized health care and pension benefits - It's called spreading the risk, stupid. Too bad it's probably too late for Ford, not that it will affect Mulally's bonus.

Still Think the Marketplace Solves Everything?

Canadians healthier than Americans, study finds

"These findings raise serious questions about what we're getting for the $2.1 trillion we're spending on health care this year," said Dr. David Himmelstein, an associate professor of medicine at Harvard.

"We pay almost twice what Canada does for care, more than $6,000 for every American, yet Canadians are healthier, and live two to three years longer," Himmelstein added in a statement.

What we're getting is a bloated bureaucracy, American-style, where the bureaucrats are in the board room rather than in government and their incentives are often not geared toward the effective delivery of good health care.

Let's see. Over here we have skyrocketing insurance costs, and over here we have a monopoly on insurance. I wonder if they're related.

Here's an item that sheds some light on the mystery of rising health care costs.

Consolidation among health insurers is creating near-monopolies in virtually all reaches of the United States, according to a study released Monday.

Data from the American Medical Association show that in each of 43 states, a handful of top insurers have gained such a stronghold that their markets are considered "highly concentrated" under U.S. Department of Justice guidelines, often far exceeding the thresholds that trigger antitrust concerns.

The study also shows that in 166 of 294 metropolitan areas, or 56 percent, a single insurer controls more than half the business in health maintenance organization and preferred provider networks underwriting.
…
Critics say that carriers are not only creating monopolies and oligopolies in many regions, they also control the other side of the equation in what is known as monopsony power. That means in addition to having the most enrollees, they're also the biggest purchasers of health care and can dictate prices and coverage terms.

It also makes it harder for new carriers to emerge, as pricing already has been set by the dominant carrier.

Yes, there are many factors contributing to the problem including, profligate use of medical technology, an aging population, and risky behaviors that lead to things like obeisity. But what about this.

The AMA says there have been more than 400 mergers among health-care insurers in the past decade. As they've consolidated and presumably eliminated duplicative functions, they're not passing the savings in personnel and administrative costs on to consumers. Rate increases, though slowing, are higher than ever and growing at a near double-digit pace.

Is this what they call a single-payer system?

Village Bicycle Project

Help get this documentary on TV. It's about a project to get unwanted bicycles in the US into the hands of people who need them in Ghana, and it's directed by my brother-in-law's sister, Tricia Todd. Go to this link, watch the short, and if you think it's good, 'greenlight' it. Tricia is back in Ghana now to follow up and get the final interviews for the feature length version of the film.

The Sorry State of Health Care in Texas

The American system for providing access to health care is in a state of collapse. That’s not news. But you might be interested to know that the great State of Texas is in worse shape than almost any other.

Last night a task force, made up mostly of the major Texas teaching hospitals, presented its report on the subject titled Code Red: The Critical Condition of Health Care in Texas. The facts illustrating this crisis aren’t breaking news either, but they are worth looking at if only for their pure shock value.

• Twenty-five percent of Texans are uninsured, compared to the national average of 15%. In the Houston metropolitan area that figure jumps to one-third—about 1,000,000 people.
• In 2004, 40% of the state’s Hispanic population was uninsured. New immigrants are largely uninsured, but represent only about 18% of the state’s total uninsured population.
• In Texas, 22% of children are uninsured. The national average is 12%.
• The average cost of private health insurance for a family of four in 2005 was $9,100—approximately half the annual income of a family at 100% of the Federal Poverty Level (FPL). A family making $40,000 a year, which is above the state average, would pay about one-quarter of its annual income for health insurance.
• Most employers in Texas have fewer than 50 employees. Only 37% of them can afford to offer their employees health benefits. Worse yet, only 35% of those employees can afford to actually enroll. Seventy-nine percent of uninsured adults in Texas are in the workforce or have one or more working family member. Two out of three have incomes below 200% FPL.
• Medicaid is an important source of insurance for poor people, but not in Texas. State legislatures determine eligibility based on income as a percentage of FPL. In the enlightened state of Minnesota that is 275% for a non-working parent. In Texas it’s 14%. That’s $1,300 a year. If you get a good tip and make $1,500 you lose your eligibility.
• Limiting Medicaid spending was a short-sighted way for the Texas Legislature to cut costs, but for every dollar the state refuses to spend on Medicaid it is throwing away $1.50 in federal matching funds. This is pretty important because it has a direct affect on the ability of hospitals to offer residency programs and, you guessed it, Texas also has a shortage of doctors. It also limits the viability of Federally Qualified Health Centers (FQHC), the clinics that treat many of the uninsured, because they rely for their survival on reimbursements from patients who are covered by Medicaid. Not surprisingly, Texas is also way behind in this category. Chicago, for example, has more than 70 FQHCs. Houston has 10.

Access to health care should be at the top of everybody’s domestic issue list for a number of reasons. I hope to explore many of them in future posts. For now, consider this the next time you pay your premium bill—if you’re lucky enough to be insured: 20% of that payment is going to offset the cost of your uninsured neighbors.

You can read Code Red here.

In Italy, Fascism Apparently Out of Style

Berlusconi toppled in election yesterday by Romano Prodi and his center-left coalition of Catholics, social democrats, communists, and environmentalists.

However, the margin of victory in the chamber came down to 25,000 votes. Berlusconi himself has not yet commented on the results, but his allies have called for a recount of up to 500,000 spoiled ballots.

A recount could unleash political chaos, evoking the 2000 U.S. presidential election, which ended in a bitter recount battle in Florida. For now, however, all eyes are on the vote count for the upper house, the Senate.