Stephen Hawking vs the NHS

Via Kevin Drum, this editorial in Investor’s Business Daily.

… People such as scientist Stephen Hawking wouldn’t have a chance in the U.K., where the National Health Service would say the life of this brilliant man, because of his physical handicaps, is essentially worthless. …

Hawking is, of course, British. He lives and teaches in Cambridge (UK, not MA).

And that’s not the silliest part of the editorial. Have a look if you’ve got nothing better to do and see how Obama is going to kill your grandma.

Update: Hawkings responds:

I wouldn’t be here today if it were not for the NHS. I have received a large amount of high-quality treatment without which I would not have survived.

Update 2: IBD has edited the Hawking mention out of the editorial.

Update 3. Iain Murray at NRO:

Yesterday, I explained that it is ludicrous to argue that the NHS never gives quality care and that Prof. Hawking is a good example of when it does give world-class care. However, the mere fact that he received such care does not mean that the NHS is perfect.

No doubt that will come as a surprise to all those who have been insisting that the NHS is, in fact, perfect.

Where’s the passion?

Paul Krugman invokes Yeats today at the end of a column on the town-hall mobs.

… But right now Mr. Obama’s backers seem to lack all conviction, perhaps because the prosaic reality of his administration isn’t living up to their dreams of transformation. Meanwhile, the angry right is filled with a passionate intensity.

And if Mr. Obama can’t recapture some of the passion of 2008, can’t inspire his supporters to stand up and be heard, health care reform may well fail.

Mr Krugman (and Mr Obama and his crew) would do well to look to another text, Revelation 3:16.

So then because you are lukewarm, and neither cold nor hot, I will spew you out of my mouth.

Passion begets passion. Harry Reid and Max Baucus do not.

The Specter of Losing an Election

About a week ago, Nate Silver posted an interesting piece on Arlen Specter’s recent voting behavior. Here’s the most interesting graph:

specter5.PNG

The key events on the timeline were the Quinnipiac poll, which shows Specter losing badly to a right-wing Republican challenger, Specter’s subsequent switch to the Democratic Party, and finally the prospect of a primary challenge from the left.

First, it’s apparent that Specter’s votes are driven overwhelmingly by a desire to be reelected. My sense is that Specter is a likely winner in the general election against either potential opponent, so his strategy is to focus entirely on the primary.

A commenter writes:

Well, at least Specter is responsive to the voters. That’s more than can be said for senators like Max Baucus, who seems to be working solely for the insurance companies. Baucus, unfortunately, has 5 more years before having to worry about re-election so he can continue rolling in the favors from big insurance to get his friends positions as healthcare lobbyists, popular will be damned.

I don’t think that the comparison is necessarily apt. Baucus is a long ways from his election, and voters have short memories, so who’s to say what he’ll do in 2–3 years? And if we assume that Baucus is as driven by the desire for reelection as Specter, then, given his situation, his best strategy might well be to ensure a steady supply of campaign funds, rather than worry too much about a challenge from the left in Montana.

You can’t win a Senate, or even a House, election without a big pot of money, and without getting through a primary (well, Lieberman only needed the former, but his case is exceptional). And the more competitive a seat is, the more a senator or house member is motivated to be “flexible” in their voting, to ensure a steady stream of cash or primary voters, as needed.

What a system.

Lack of Dynamism Seems to Be More a Problem in the U.S. Than Europe

It’s nice to hear a story like this and then find that Dean Baker has dealt with it before I even got out of bed.

Lack of Dynamism Seems to Be More a Problem in the U.S. Than Europe

NPR did a segment this morning asking whether the U.S. economy would likely develop to be more like Europe’s. At one point it presents the comment of the employee of a German software company, that he wished Germany’s economy was “more dynamic.”

While the media frequently repeat lines like this, it is not clear what they mean. The productivity experience of Europe and the United States over the last quarter century has been comparable. If small business is viewed as the key measure of dynamism than the United States lags badly.

A much larger share of the workforce is employed in small businesses in most European countries than in the United States. This could reflect the fact that many potential small entrepreneurs in the United States don’t want to take the risk of going without health insurance.

—Dean Baker

Doctor Self-Referrals Part of Health-Care Cost Trend

Via Dean Baker, who had two good things to say about Washington Post articles today. Surely the Second Coming is at hand.

Doctor Self-Referrals Part of Health-Care Cost Trend

Doctors Reap Benefits By Doing Own Tests
By Shankar Vedantam
Washington Post Staff Writer
Friday, July 31, 2009

In August 2005, doctors at Urological Associates, a medical practice on the Iowa-Illinois border, ordered nine CT scans for patients covered by Wellmark Blue Cross and Blue Shield insurance. In September that year, they ordered eight. But then the numbers rose steeply. The urologists ordered 35 scans in October, 41 in November and 55 in December. Within seven months, they were ordering scans at a rate that had climbed more than 700 percent.

The increase came in the months after the urologists bought their own CT scanner, according to documents obtained by The Washington Post. Instead of referring patients to radiologists, the doctors started conducting their own imaging — and drawing insurance reimbursements for each of those patients.

In focusing on health-care reform this year, President Obama pledged that a revamped system would hold down exploding costs. But none of the players — Congress, the administration or the array of interests involved in the process — has offered a clear path to that goal. And efforts to control medical practices that have driven up expenses, including physician “self-referrals,” underscore how difficult it is to alter entrenched patterns.

A host of studies and reports by academics and the federal government shows that physicians who own scanners order many more scans than those who do not. As a result, Americans pay billions of dollars in extra taxes and insurance premiums.

Government panels have found that, across several areas of medicine, ordering more procedures does not improve health outcomes. In the case of medical scans, unnecessary imaging also creates a health risk — as many as 1 percent of all cancers in the United States appear to be caused by radiation from medical imaging, according to Amy Berrington de Gonzalez, a radiation epidemiologist at the National Cancer Institute.

A ‘Common Sense’ American Health Reform Plan – Economix Blog – NYTimes.com

Uwe E. Reinhardt is an economics professor at Princeton. There’s more at the link.

20narc-190.jpgA ‘Common Sense’ American Health Reform Plan

The All-American Wish List for Health Reform

1. Only patients and their own doctors should decide what clinical response is appropriate for a given medical condition, even if that response involves unproven clinical procedures or technology.

2. Neither government bureaucrats nor private insurance bureaucrats should ever refuse to pay for whatever patients and their doctors have decided to do in response to a given medical condition. An insurer’s refusal to pay for a medical procedure is tantamount to rationing health care.

3. Rationing health care is un-American.

4. Cost-effectiveness analysis should never be the basis of any coverage decision by public or private third-party payers in health care, for to do so would put a price on human life — which, in America, unlike everywhere else, is priceless.

5. Government should not require individuals to purchase health insurance. Such a mandate would violate the constitutional rights of freedom-loving Americans.

6. Americans have a moral right to life-saving and potentially highly expensive medical care, should they fall critically ill, even if they are uninsured and could not possibly pay for that care with their own financial resources. (Why else would God have created hospitals and their emergency rooms?)

7. Government should stay out of health care. Specifically, government should not control health care prices, nor should it increase its spending on health care, which is out of control.

8. Even small reductions to the future growth of Medicare spending — called “cuts” in Washington parlance — unfairly burden the elderly, along with the doctors and hospitals that serve them and the manufacturers of health products, lest the pace of technical innovation be impaired.

The Post Warns Again About a Country Becoming Less Crowded and Polluted

A variation on a Dean Baker theme that bears repeating. Once you start noticing them, you’ll hear warnings about the hazards of a slowdown in population growth all over the place.

Some time back I reviewed Herman Daly’s 1997 Beyond Growth for a local wood-chip-based publication. In it, Daly argues (I oversimplify) for a move from quantitative to qualitative growth. It’s still useful; check it out.

The Post Warns Again About a Country Becoming Less Crowded and Polluted

This time the problem child is South Korea, which the Post tells us will have the oldest population on the planet by 2050. They may not have enough people to work as valet parkers at restaurants or the mid-night shift at convenience stores. This sounds very scary. Just imagine, a low unemployment rate and high wage; what a disaster!

The decline in South Korea’s saving rate, which is the main issue in the story, turns out to be much less of a story when you read through it. According to the article, one reason for the low saving rate is the large amount of money that Koreans spend on education in the form of private schools, tutors, and other expenditures to ensure that children do well in school.

In GDP accounts, education spending by households is counted as consumption. In reality, it is a form of investment. More educated workers are more productive workers. If the next generation of South Koreans all have the equivalent of medical degrees or PhDs, they will not have to worry about their lack of saving.

—Dean Baker

The problem with federalism

James Surowiecki: Fifty ways to kill recovery

If you came up with a list of obstacles to economic recovery in this country, it would include all the usual suspects—our still weak banking system, falling house prices, overindebted consumers, cautious companies. But here are fifty culprits you might not have thought of: the states. Federalism, often described as one of the great strengths of the American system, has become a serious impediment to reversing the downturn.

The tension between state and national interests isn’t new: it dates back to clashes in the early Republic over programs for “internal improvements.” Of course, the federal government is far bigger than it once was, and yet in the past two decades we’ve delegated more authority, not less, to the states. The logic of this was clear: people who are closer to a problem often know better how to deal with it. But matters of a truly interstate nature, like the power grid, can’t be dealt with on a state-by-state basis. And fiscal policy is undermined if the federal government is doing one thing and the states are doing another. It’s a global economy. It would be helpful to have a genuinely national government.

Why markets can’t cure healthcare

There’s more, of course; this is the last graf.

Paul Krugman: Why markets can’t cure healthcare

… All of this doesn’t necessarily mean that socialized medicine, or even single-payer, is the only way to go. There are a number of successful health-care systems, at least as measured by pretty good care much cheaper than here, and they are quite different from each other. There are, however, no examples of successful health care based on the principles of the free market, for one simple reason: in health care, the free market just doesn’t work. And people who say that the market is the answer are flying in the face of both theory and overwhelming evidence.

Crows, face recognition, cavemen, and Dick Cheney

Listen to this fine NPR story on crows recognizing individual people. There’s a video on the page as well, but the original story is better than the video.

Aside from the inherent interest of the immediate story, it’s a nice example of science at work in the wild, where unexpected observations are investigated, complete with controls and new opportunities for research.

His majesty the policeman

lordbuckley.gifCurrent events bring to mind, as they must from time to the, the words of the immortal Lord Buckley. Mr Gates has been at Harvard far too long to be hip, of course (what’s too long? Buying a ticket for Cambridge?), but surely there was a time when he would have remembered Buckley’s critical piece of advice:

And if you’re really hip
You’ll never make a slip
Against Their Majesties, The Policemen

What can count as disorderly conduct in Massachusetts? Among other things, acting “with purpose to cause public inconvenience, annoyance or alarm.” Don’t annoy us, children, it only makes us cross.

Update: Robin Wells gets it just about right, seems to me.

His Majesty The Policeman

I got to thinking about His Majesty, The Policeman, see.
I figured that must be the draggiest job in the world.
And what a drag it is going out on a good day.
You’re feeling really good.
You’re riding along and your squad car is all polished up,
you know what I mean.
And you’re feeling real mellow.
Along comes some poor stud with a –
loaded with kids, like flower pots all over the place.
Going a little too fast, you know what I mean.
You’ve got to stop the cat.
You’ve got to bring him down and lay one on him.
It’s a pretty tough job
and when you walk up to him you don’t know
whether they’re going to pull out
a French seventy-five or what-the.
It’s a drag. So, I wrote a little thing called:

[sings]
His Majesty, The Policeman,
He’s the children’s friend at every bend,
The Policeman
And you can bet your life,
He’s hip to Mack the Knife
That’s His Majesty, The Policeman

You should never trip a policeman
Or try to hip or even tip a policeman
Get a ticket to the ball
And you can’t fight city hall
That’s His Majesty, The Policeman

So remember their nobility
They’re here, they’re there, they’re everywhere it’s mobility
You can look near and far but they’ll pin you by radar
That’s Their Majesty, The Policeman

Here they come – hewbetty boop
The Man In Blue – hoobbit bop
The Sargent’s there – ribbetty bip
The Patrolman too – hahbetta bop
The Chief looks great – hahbetta bop
The Captain’s straight – ribbetty bip
Hip Hip Hurray – da da da dah
The Royal Crew – Habetta bahbetta bah

You always try to swing with a policeman
And never ring-a-ding a policeman
And if you’re really hip
You’ll never make a slip
Against Their Majesties, The Policemen

We all know what would have happened if Goldman lost on these bets…

The Folks Who Want to Cut Social Security Applaud Government Subsidies for Huge Wall Street Bonuses

No, I am not kidding. The Washington Post (Fox on 15th Street) applauded the big profits at Goldman, which will mean bonuses in the tens of millions of dollars for top performers. Goldman is able to make these payouts because it won with the bets that it made with taxpayers’ money. We all know what would have happened if Goldman lost on these bets.

(If you answered something like bankruptcy and unemployed managers, you obviously know nothing about modern economics.)

—Dean Baker

Small businesses and jobs creation

We need to be reminded of this from time to time. Dean Baker does the reminding today.

The Role of Small Business in the Economy Might be a Mystery to the Washington Post, but Not to Economists

… There had been some debate in the 90s about whether small businesses were responsible for a disproportionate share of job creation. While this is true, small businesses are also responsible for a disproportionate share of job loss. Most small businesses only survive a few years. As a result, small businesses on net, create new jobs at roughly the same rate as larger businesses. …

Why We Must Ration Health Care

Peter Singer, always interesting, on rationing health care (long).

Why We Must Ration Health Care

19health-600.jpg

You have advanced kidney cancer. It will kill you, probably in the next year or two. A drug called Sutent slows the spread of the cancer and may give you an extra six months, but at a cost of $54,000. Is a few more months worth that much?

If you can afford it, you probably would pay that much, or more, to live longer, even if your quality of life wasn’t going to be good. But suppose it’s not you with the cancer but a stranger covered by your health-insurance fund. If the insurer provides this man — and everyone else like him — with Sutent, your premiums will increase. Do you still think the drug is a good value? Suppose the treatment cost a million dollars. Would it be worth it then? Ten million? Is there any limit to how much you would want your insurer to pay for a drug that adds six months to someone’s life? If there is any point at which you say, “No, an extra six months isn’t worth that much,” then you think that health care should be rationed.

One final comment. It is common for opponents of health care rationing to point to Canada and Britain as examples of where we might end up if we get “socialized medicine.” On a blog on Fox News earlier this year, the conservative writer John Lott wrote, “Americans should ask Canadians and Brits — people who have long suffered from rationing — how happy they are with central government decisions on eliminating ‘unnecessary’ health care.” There is no particular reason that the United States should copy the British or Canadian forms of universal coverage, rather than one of the different arrangements that have developed in other industrialized nations, some of which may be better. But as it happens, last year the Gallup organization did ask Canadians and Brits, and people in many different countries, if they have confidence in “health care or medical systems” in their country. In Canada, 73 percent answered this question affirmatively. Coincidentally, an identical percentage of Britons gave the same answer. In the United States, despite spending much more, per person, on health care, the figure was only 56 percent.

James Hansen: Waxman-Markey bites

Thanks to Michael J Smith for pointing us to James Hansen’s fine takedown of Waxman-Markey. I’m not going to quote much of it here; it’s fairly brief, and nicely written. Please click through and read it.

A side note: economists will tell you that, economically speaking, a cap-and-trade system has identical economic incentives to a carbon tax. What they ignore is that a cap-and-trade bill is an embarrassingly easy target for lobbyists to turn into … Waxman-Markey.

G-8 Failure Reflects U.S. Failure on Climate Change

It didn’t take long for the counterfeit climate bill known as Waxman-Markey to push back against President Obama’s agenda.

With the Senate debate over climate now beginning, there is still time to turn back from cap-and-trade and toward fee-and-dividend. We need to start now. Without political leadership creating a truly viable policy like a carbon fee, not only won’t we get meaningful climate legislation through the Senate, we won’t be able to create the concerted approach we need globally to prevent catastrophic climate change.

Smith also points us to Joseph Romm’s attack on Hansen’s article, in which he manages to embarrass himself and the Center for American Progress. I won’t link to it here; you can get it from Michael, and you want to read his piece anyway.

CalPERS suing ratings agencies

Via Barry Ritholtz. This should be fun.

CalPERS: Rating Agencies to Blame for Huge Losses

Way back when, I mentioned there was a surprise coming S&P’s way. Since it is now out there officially, I can discuss it publicly.

After the brouhaha with McGraw Hill began, I was contacted by numerous people — mostly readers emailing words of support. But a few West Coast lawyer types seemed to be asking lots of questions, and revealing little.

I poked around with some law firms in California, and started to pick up the rumor that California Public Employees’ Retirement System (CalPERS) was going to drop the bomb on S&P, Moody’s and Fitch. No one would say anything on the record, but it was clear that litigation was being considered as an option against the Ratings Agencies.

Here is the money quote:

The AAA ratings given by the agencies “proved to be wildly inaccurate and unreasonably high,” according to the suit, which also said that the methods used by the rating agencies to assess these packages of securities “were seriously flawed in conception and incompetently applied…”

“The ratings agencies no longer played a passive role but would help the arrangers structure their deals so that they could rate them as highly as possible,” according to the CalPERS suit.

Now, here comes the fun part: CalPERS doesn’t give a rat’s ass about the money. Sure, the financial instruments at hand (Cheyne Finance, Stanfield Victoria Funding and Sigma Finance) have  defaulted on their payment obligations. The losses to Calpers are ~$1 billion.

But that’s not what’s going on here: These Left Coasters want their pound of flesh. They don’t care for the Ratings Agency folks, and consider them a blight on the investment landscape.

The goal of the litigation (as I see it) isn’t to make the rating agencies pay a financial penalty; rather, it is to publicly try them just as the regulatory rules are being rewritten. I also predict that CalPERS is going to attempt to not just win, but humiliate these agencies, call them out in the most embarrassing way possible, trash the senior executives, and make things very uncomfortable in general for these firms.