Went to a big street fair today. Great weather, big crowd. Here’s a picture of the Obamacare signup booth.
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Went to a big street fair today. Great weather, big crowd. Here’s a picture of the Obamacare signup booth.
Posted by Michael Kennedy on 4th February 2014 (All posts by Michael Kennedy)
I have believed for some time that we were entering another Depression. I have previously posted about it.
The Great Depression did not really get going until the Roosevelt Administration got its anti-business agenda enacted after 1932. The 1929 crash was a single event, much like the 2008 panic. It took major errors in economic policy to make matters worse. Some were made by Hoover, who was a “progressive” but they continued under Roosevelt.
The second article preceded the election of 2012 but is still valid.
When employment hit an air pocket in December, most analysts brushed off the dreadful jobs number as an anomaly, or a function of the weather. They chose to believe Ben Bernanke rather than their lying eyes. It’s hard to ignore a second signal that the U.S. economy is dead in the water, though: on Monday the Institute for Supply Management reported the steepest drop in manufacturing orders since December 1980:
In January, only 51% of manufacturers reported a rise in new orders, vs. 64% in December. Not only did the U.S. economy stop hiring in December, with just 74,000 workers added to payrolls; it stopped ordering new equipment. The drop in orders is something that only has occurred during recessions (denoted by the shaded blue portions of the chart). The Commerce Department earlier reported a sharp drop in December orders for durable goods. In current dollars, durable goods orders are unchanged from a year ago, which is to say they are lower after inflation.
So, the economy stopped hiring, even at the poor pace the past five years have seen, but business also stopped buying.
Posted by Michael Kennedy on 18th January 2014 (All posts by Michael Kennedy)
“Accenture, one of the world’s largest consulting firms, has extensive experience with computer systems on the state level and built California’s large new health-insurance exchange. But it has not done substantial work on any Health and Human Services Department program.
“The administration’s decision to end the contract with CGI reflects lingering unease over the performance of HealthCare.gov even as officials have touted recent improvements and the rising numbers of Americans who have used the marketplace to sign up for health coverage that took effect Jan. 1.”
CGI Federal is the company connected with Michelle Obama through her classmate, a fellow Princeton alumna.
All during late November and December of last year, I began seeing internet discussions of the looming disaster that is Obamacare – and yes, I will hang that name on the so-called Affordable Care Act, also known as the un-Affordable Care Act. The man behind the desk in the Oval Office pursued this as his singular achievement; his legislative allies rammed it through over protest, and his media allies have viciously abused those who advised caution. So it is only fitting and fair that his name get attached to it at every opportunity, especially if it brings down his whole political machine in a spectacular fashion, rather like a slow-motion Hindenberg collapsing.
The “Affordable Care Act,” aka Obamacare, seems to be full of surprises. For example, it seems that many Americans are being forced onto Obamacare exchanges where most plans provide only local medical coverage…a bit of a problem for people who travel, change jobs, or have vacation homes. To take another example, this Washington Post article says Obamacare may make it impossible for people living in American territories (such as Guam and the Northern Mariana Islands) to purchase health insurance policies at all. “Unexpected!” results of Obamacare seem to be almost daily news.
These surprises especially strike those ordinary Americans who are the targeted users of Obamacare, of course…but also, they seem to strike many of the creators of the program. Some members of the government classes, of course, simply lied about Obamacare’s effects…first and foremost this is notoriously true of Obama himself. But I also feel sure that there are many among those CongressCreatures who voted for this 2000-page bill who have been genuinely surprised by some or many of its outcomes. It is simply not possible to clearly predict in advance the effects of a piece of legislation so all-encompassing, so verbose, and so quickly pushed through.
Rose Wilder Lane, still at that point a Communist, visited the Soviet Union in 1919. After she explained the benefits of central planning to a disbelieving village leader, he shook his head sadly and said:
It is too big – he said – too big. At the top, it is too small. It will not work. In Moscow there are only men, and man is not God. A man has only a man’s head, and one hundred heads together do not make one great big head. No. Only God can know Russia.
Indeed, one hundred or one thousand or ten thousand heads together in the form of CongressCreatures or health care bureaucrats did not suffice to make one great big head that would fully grasp the implications of Obamacare. Nancy Pelosi was sort of right when she said “But we have to pass the bill so that you can find out what is in it”…she should have carried it further and said: “We have to pass the bill so that we can find out what’s in it.”
It is precisely this difficulty in predicting the outcomes of sweeping change, on a society-wide scale, that makes such sweeping and radical change something to be usually avoided..and when indeed necessary, to be conducted with caution and careful forethought. British statesman and political philosopher Edmund Burke made this point eloquently and famously. Nothing could be more anti-Burkean than Obama’s statement on October 30, 2008: “We are five days away from fundamentally transforming the United States of America.”
After coming to realize that the defects of Communism are inherent and not just due to problems with one particular implementation of it, Rose Wilder Lane also became convinced that:
Centralized economic control over multitudes of human beings must therefore be continuous and perhaps superhumanly flexible, and it must be autocratic. It must be government by a swift flow of edicts issued in haste to catch up with events receding into the past before they can be reported, arranged, analyzed and considered, and it will be compelled to use compulsion. In the effort to succeed, it must become such minute and rigorous control of details of individual life as no people will accept without compulsion. It cannot be subject to the intermittent checks, reversals, and removals of men in power which majorities cause in republics.
Note how this comment ties in with the Obama administration’s tendency to adjust the healthcare insurance program via quick and arbitrary administrative rulemaking, rather than via the legislative process. RWL would say that this kind of behavior is inherent in a program intended to establish government control over vast swaths of society.
She also notes that:
Nobody can plan the actions of even a thousand living persons, separately. Anyone attempting to control millions must divide them into classes, and make a plan applying to these classes. But these classes do not exist. No two persons are alike. No two are in the same circumstances; no two have the same abilities; beyond getting the barest necessities of life, no two have the same desires.Therefore the men who try to enforce, in real life, a planned economy that is their theory, come up against the infinite diversity of human beings. The most slavish multitude of men that was ever called “demos” or “labor” or “capital” or”agriculture” or “the masses,” actually are men; they are not sheep. Naturally, by their human nature, they escape in all directions from regulations applying to non-existent classes. It is necessary to increase the number of men who supervise their actions. Then (for officials are human, too) it is necessary that more men supervise the supervisors.
…and discusses the temptations of power to a leader who believes in expansionist government:
If he wants to do good (as he sees good) to the citizens, he needs more power. If he wants to be re-elected, he needs more power to use for his party. If he wants money, he needs more power; he can always sell it to some eager buyer. If he wants publicity, flattery, more self-importance, he needs more power, to satisfy clamoring reformers who can give him flattering publicity.
Posted by Michael Kennedy on 2nd January 2014 (All posts by Michael Kennedy)
David has a good idea. I often read the archives of my personal blog to see how I did in forecasting the future or understanding the present. A major concern of mine is, of course, health care and what is happening. When I retired from surgery after my own back surgery, I spent a year at Dartmouth Medical School’s center for study of health care. My purpose was to indulge an old hobby. How do we measure quality in health care ? I had served for years on the board of a company called California Medical Review, Inc. It was the official Medicare review organization for California. For a while I was the chair of the Data Committee. It seems to have gone downhill since I was there. First, it changed its name in an attempt to get more business from private sources. Then it lost the Medicare contract.
Lumetra, which lost a huge Medicare contract last November, is changing its name and its business model as it seeks to replace more than $20 million in lost revenue.
The San Francisco-based nonprofit’s revenue will shrink this year from $28 million last fiscal year, ending in March 2009, to a projected $4.5 million, CEO Linda Sawyer told the Business Times early this week.
That’s in large part because it’s no longer a Medicare quality improvement contractor, formerly its main line of work. And in fact, the 25-year-old company’s revenue has been plummeting since fiscal 2007, when it hit $47 million.
I see no sign that it is involved with Obamacare which is being run from Washington with a state organization that seems no better run than the parent organization.
Beginning Jan. 1, 2015, the Affordable Care Act no longer will provide federal grants to fund state health exchanges. In addition, California law prohibits using the state’s general fund to pay for the exchange.
Anyway, for what it is worth, here are the links to the 2013 health posts.
President Obama has been unwilling to admit that the problems with the Obamacare roll-out might suggest that he needs to work on improving his management skills. Instead, he has chosen to blame the complexities of government bureaucracy, and in particular the complexities of the government procurement process–all matters that have seemed to be rather surprising to him–and this view has predictably been echoed by some in the pundit class.
I have several thoughts on this matter:
1) It is not yet clear to what extent the Obamacare systems problems are a function of too much bureaucracy in the procurement process versus too little bureaucracy in that process as employed in this specific case. In particular, were Serco and CGI and other key contractors selected based on the robot-like processes of the Federal procurement system…or was heavy political influence involved? I don’t think we know yet.
2) A good workman understands the limitations of his tools and materials. We wouldn’t think much of a civil engineer who designed a high-traffic-carrying bridge without paying close attention to the load-bearing characteristics of the steel girders and cables used; nor would we think much of an architect who designed a house in which a family was investing much of their financial net worth without considering the weather resistance of the wood and other materials he was specifying. Shouldn’t Obama, before embarking on a plan to greatly increase the Federal Government’s role in healthcare, have seriously considered the characteristics and limitations of the tools and materials that he was using–the Federal agencies and their policies and procedures–for this purpose? He stands convicted out of his own mouth for not performing this basic level of due diligence.
3) Whatever the encumbrances of the Federal bureaucracy–and yes, we all know they are significant–nothing prevented Obama from taking a more serious and responsible executive role in supervising the roll-out, and/or putting effective people in key leadership positions. Can there be any doubt that if a person of the quality of General Bernard Schriever, for example, had been put in control of the technology and paperwork process implementation, the odds of success would have been considerably better?
4) Most important: Obama and his media/academic sycophants refuse to understand the inevitable limitation of government micromanagement. I’ve previously quoted Peter Drucker:
Whether government is “a government of laws” or a “government of men” is debatable. But every government is, by definition, a “government of paper forms.” This means, inevitably, high cost. For “control” of the last 10 per cent of any phenomenon always costs more than control of the first 90 per cent. If control tries to account for everything, it becomes prohibitively expensive. Yet this is what government is always expected to do.
The reason is not just “bureaucracy” and red tape; it is a much sounder one. A “little dishonesty” in government is a corrosive disease. It rapidly spreads to infect the whole body politic. Yet the temptation to dishonesty is always great. People of modest means and dependent on a salary handle very large public sums. People of modest position dispose of power and award contracts and privileges of tremendous importance to other people–construction jobs, radio channels, air routes, zoning laws, building codes, and so on. To fear corruption in government is not irrational.
This means, however, that government “bureaucracy”— and its consequent high costs—cannot be eliminated. Any government that is not a “government of forms” degenerates rapidly into a mutual looting society.
(I’m confident Professor Drucker would agree that whether the forms are paper or electronic makes no difference at all in this context.)
As I also noted earlier: the expansion of government into all aspects of human life leads to increasing inefficiency–while the increasing frustration with bureaucracy results in a widespread demand to “make government more responsive” by giving more discretionary authority to administrators and to their political superiors. This is exactly what we are seeing with Obamacare, with the emphasis at present being on an increase of discretionary authority for the political superiors of the administrators. This, in turn, must result in a government which is not only a looting society (Obamacare waivers or special privileges for politically-well-connected groups, for example) but increasingly a tyranny. Yet at the same time, there will still be enough baroque proceduralization (selectively enforced) to ensure high levels of inefficiency and very high government administrative costs. And the discretionary authority–the movement away from a Government of Laws and toward a Government of Men–must create widespread uncertainty and, consequently, equally widespread economic damage.
People signing up for Obamacare are being robbed by the government. This time it’s not metaphorically, like when your perfectly satisfactory insurance plan is made illegal and all the compliant plans are more expensive and have worse terms but literally. People are having their accounts debited improperly during the Christmas season. And because it is being done by the government, there is little recourse to sue due to sovereign immunity and, of course, those most injured haven’t the money to hire representation anyway. I think Pope Francis calls it ‘despoliation of the poor’.
Double debits, wrong day debits, wrong amount debits, these are all standard hazards with any sort of Electronic Funds Transfer (ETF) system. There’s nothing particularly new about these issues. It’s all part of the back end errors that those dastardly Republicans have been hyperventilating about and Democrats have been pooh poohing for weeks now.
You never know when Tuttle will turn into Buttle in one of these systems. But what’s in a name?
Cross posted: Flit-TM
Bruce Webster writes about the parallels (and differences) between the design of legislation and the design of software systems.
(via a thread at Bookworm)
1. The problem with Obamacare is that it fundamentally changes the relationship of government to the people. The change is wholly malign. There is no way to operate the Obamacare system and also force the government to respect the people’s rights. Obamacare will, at every step, increase the risk at which government holds our rights.
We’re already seeing that with the roll-out, which has promptly violated the president’s best-known and most categorical promises – an indication of his complete lack of respect for us – as well as the people’s rights to decide what to do with their own property (in this case, their earnings), and to execute private contracts according to their own preferences.
What matters about Obamacare is that it has forced so many people to do so many things involuntarily. It will continue to do so. Obamacare is about government force, about limiting people’s options, and about constraining the people to do or not do certain things. That’s what government is about, which is why it’s what Obamacare is about. Government is incapable of being about anything else.
The public debate right now treats the Obamacare fiasco as if the central proposition is that taking over one-sixth of the economy is a technological challenge. The reality that matters is that government taking over the network of human decisions involved in “health care” is a moral outrage. Doing that is applying the model of regulatory force to a vast complex of human questions that have no universal, “right” answers. We might as well let the government tell us what to eat, what to wear, where to live, and what God to believe in – and if Obamacare stands, our government will eventually do just that.
Quite frankly, I think the advice to Republicans to simply stand silent and “let Obamacare implode” is foolish. There is no hope of Obamacare imploding. It’s not a malformed bomb, governed by physical principles. It’s a man-made political arrangement. Its defenders will keep moving the goalposts and changing the rules to keep it on the field. It will get all the overtime it needs. The only way to defeat Obamacare is to actually counter it with a plan and a principled argument.
Read the whole thing.
It has taken a long time, but the price of hearing aids is in the process of falling dramatically. How has this happened? Technological innovation, of course, but there is more. There’s no shortage of technological innovation in U.S. health care. However, because third-party payers, that is, health insurers and governments, determine prices, there is no mechanism for customers to signal value to providers.
This is not the case for hearing aids: Although some states have mandated insurance coverage for hearing aids, this is usually limited to disabled children. The big market for hearing aids is seniors, and Medicare does not cover hearing aids.
This is another case of a phenomenon observed elsewhere by NCPA Senior Fellow Devon Herrick: Where patients pay directly for medical care, prices fall like they do in every other market.
(Via Leif Smith on Twitter.)
Posted by Michael Kennedy on 19th November 2013 (All posts by Michael Kennedy)
UPDATE: The Wall Street Journal on how to fix the Obamacare crisis.
What can be done is Congress creating a new option in the form of a national health insurance charter under which insurers could design new low-cost policies free of mandated benefits imposed by ObamaCare and the 50 states that many of those losing their individual policies today surely would find attractive.
What’s the first thing the new nationally chartered insurers would do? Rush out cheap, high-deductible policies, allaying some of the resentment that the ObamaCare mandate provokes among the young, healthy and footloose affluent.
These folks could buy the minimalist coverage that (for various reasons) makes sense for them. They wouldn’t be forced to buy excessive coverage they don’t need to subsidize the old and sick.
Who knows ? Maybe Jenkins reads this blog. It’s so obvious that the solution should be apparent even to Democrats.
We are now learning that a large share of the Obamacare structure is still unbuilt. This is not the website but the guts of the system.
The revelation came out of questioning of Mr. Chao by Rep. Cory Gardner (R., Colo.). Gardner was trying to figure out how much of the IT infrastructure around the federal insurance exchange had been completed. “Well, how much do we have to build today, still? What do we need to build? 50 percent? 40 percent? 30 percent?” Chao replied, “I think it’s just an approximation—we’re probably sitting between 60 and 70 percent because we still have to build…”
Gardner replied, incredulously, “Wait, 60 or 70 percent that needs to be built, still?” Chao did not contradict Gardner, adding, “because we still have to build the payment systems to make payments to insurers in January.”
This is the guy who is the chief IT guy for CMS.
If the ability to pay the insurance companies is not yet written, how can anybody sign up ?
Gardner, a fourth time: “But the entire system is 60 to 70 percent away from being complete.” Chao: “There’s the back office systems, the accounting systems, the payment systems…they still need to be done.”
Gardner asked a fifth time: “Of those 60 to 70 percent of systems that are still being built, how are they going to be tested?”
The answer was the same way the rest was tested.
Posted by Michael Kennedy on 13th November 2013 (All posts by Michael Kennedy)
I don’t want to wear out my welcome with posts but this is a topic that has interested me for many years. When I retired from practice, I spent a year at Dartmouth trying to learn how we can improve health care delivery and reduce cost without reducing quality.
The Obamacare web site now has lost its happy photo of the Obamacare girl. The fact that she is a non-citizen seems appropriate. The web site is supposed to be fixed by November 30. Will that happen ? Well, maybe not.
On Friday, the man tasked with the digital fixes said the site “remains a long way from where it needs to be” as more and more problems emerge.
“As we put new fixes in, volume is increasing, exposing new storage capacity and software application issues,” Jeff Zients told reporters on a conference call.
And at Tuesday’s White House Press Briefing, Press Secretary Jay Carney again said there was “more work to be done” on repairing HealthCare.gov.
Carney, along with Zients and other administration officials, have repeatedly said the November 30 deadline is to get the health care website working for a “vast majority” of Americans looking to enroll in the Obamacare exchanges.
So, what happens December 2, the Monday after the “glitches” are fixed ? First, they won’t be fixed. The contractor that designed the program, not just the web site, has a terrible record.
I see today Diane Feinstein is ruffling her cankles and saying that she wants to force insurance companies to re-adopt programs that they were forced to cancel due to ZeroCare ™.
News flash Diane – IT’S TOO LATE.
Tens of thousands of small business owners like myself (and individuals and other entities) were forced to sign up to new coverage because of time constraints. Our (great) old policy was cancelled, our agents (and Blue Cross) couldn’t get to us with new policies in any sort of timely fashion because they couldn’t figure out what was legal, and what wasn’t. A few weeks ago we had a choice – sign for “this new policy” – with a dramatic price increase, or cut everyone loose to the exchanges (that don’t work) and provide them some sort of stipend.
We can’t just flip the switch back and forth. The real world doesn’t work this way. Ah, who am I kidding. They don’t exist in the real world.
Listening to Rush today. He is brilliant on politics but not as good on economics.
He was advocating self-insurance for small businesses and individuals, in response to the Obamacare fiasco. He mentioned as an example that he had decided to self-insure a building (I think his home near a Florida beach) in response to his property insurer’s insistence on an extremely high deductible. He also said that he self-insures for medical costs.
Two problems with his analysis. One, property insurance covers buildings and building contents, so liability is easily estimated and is capped at replacement cost. Unlike with medical care there is no possibility of very large, unplanned expenses. Two, Rush is personally wealthy and can afford to pay any medical expenses out of pocket. For these reasons his argument has limited applicability for most people, who buy health insurance precisely because they would be unable to pay an outlier medical bill without experiencing significant hardship. The same point applies to many small businesses as well. These groups thus need real insurance to cover outlier medical expenses. A self-insurance quick-fix would be inadequate.
Over at Sister Toldjah, Phineas cites an email which notes:
Putting things in perspective: March 21st 2010 to October 1 2013 is 3 years, 6 months, 10 days. December 7, 1941 to May 8, 1945 is 3 years, 5 months, 1 day. What this means is that in the time we were attacked at Pearl Harbor to the day Germany surrendered is not enough time for this progressive federal government to build a working webpage. Mobilization of millions, building tens of thousands of tanks, planes, jeeps, subs, cruisers, destroyers, torpedoes, millions upon millions of guns, bombs, ammo, etc. Turning the tide in North Africa, Invading Italy, D-Day, Battle of the Bulge, Race to Berlin – all while we were also fighting the Japanese in the Pacific!! And in that amount of time – this administration can’t build a working webpage.
To be fair, the Obamacare support system is more than just a “webpage”…it also encompasses various back-end information-exchange systems. Still, it is a system that did not require the development of any truly new technologies or any conceptual breakthroughs in the use of existing technologies. Compared to any of a large number of WWII technology, manufacturing, and logistics efforts…proximity-fused ammunition, airborne radar, computer-based codebreaking, mass-production of airplanes and ships, the petroleum pipeline under the English Channel…the Obamacare support system is a very small thing indeed.
History and experience teach us that large, complex, time-critical programs only get done successfully when they are run by individuals who are tough-minded, possessed of practical wisdom, and willing to put their careers on the line to accomplish the goal…and when higher authority is willing to delegate sufficient scope and empowerment to such leaders. A couple of years ago, I wrote about one example of such a leader: General Bernard Schriever, who ran USAF ballistic missile programs.
In order to achieve his goal of delivering Atlas and other missile programs in the required time frames, General Schriever found it necessary to break a lot of china. For example, when Secretary of the Air Force Harold Talbott, ordered him to relocate certain missile facilities from the west cost to the midwest (supposedly based on industrial dispersion for survivability, but actually probably driven by political factors) Schreiver flatly refused, citing his “prior and overriding orders” to get the program done in the shortest feasible time. By then a general, Schriever stuck by his position on this even when Talbott threatened him that “Before this meeting is over, General, there’s going to be one more colonel in the Air Force!”
I don’t think people with strength of character like that of Bernard Schriever do very well in the Obama administration or that they remain with it for very long. A man who can say, as Obama did, “I think that I’m a better speechwriter than my speechwriters. I know more about policies on any particular issue than my policy directors. And I’ll tell you right now that I’m gonna think I’m a better political director than my political director” is a very small man. Small men tend to hire and retain only other small men and women.
And small men and women don’t run large and complex projects effectively.
Posted by Michael Kennedy on 8th November 2013 (All posts by Michael Kennedy)
Our health care system has been built up over the years in a jury-rigged, ramshackle fashion. Before World War II, there was very little health insurance and what there was often was the product of labor union contracts. The early years were concerned with accident insurance and workers compensation laws.
The American life insurance system was established in the mid-1700s. The earliest forms of health insurance, however, did not emerge until 1850, when the Franklin Health Assurance Company of Massachusetts began providing accident insurance, to cover injuries related to railroad and steamboat travel. From this, sickness insurance covering all kinds of illnesses and injuries soon evolved, but the first modern health insurance plans were not formed until 1930.
The Baylor program for school teachers was the first in 1929.
Medical insurance took stride in 1929 when Dr. Justin Ford Kimball, an administrator at Baylor University Hospital in Dallas, Texas, realized that many schoolteachers were not paying their medical bills. In response to this problem, he developed the Baylor Plan – teachers were to pay 50 cents per month in exchange for the guarantee that they could receive medical services for up to 21 days of any one year.
In those days, the concern was lost wages more than hospital care.
In 1939, the American Hospital Association (AHA) first used the name Blue Cross to designate health care plans that met their standards. These plans merged to form Blue Cross under the AHA in 1960. Considered nonprofit organizations, the Blue Cross plans were exempted from paying taxes, enabling them to maintain low premiums. Pre-paid plans covering physician and surgeon services, including the California Physicians’ Service in 1939, also emerged around this time. These physician-sponsored plans combined into Blue Shield in 1946 and Blue Cross and Blue Shield merged into one company in 1971.
The modern insurance plans were very recent in origin. I was there for much of it. The commercial insurers fought the status of Blue Cross, which was not required to have reserves. Blue Cross asserted that it promised hospital care, not payment, so reserves were not necessary.
The 1940s and 1950s also saw the proliferation of employee benefit plans, and the included health insurance packages became more and more comprehensive as strong unions negotiated for additional benefits. During the Second World War, companies competing for labor had limited ability to use wages to attract employees due to wartime wage controls, so they began to compete through health insurance packages. The companies’ healthcare expenses were exempted from income tax, and the resulting trend is largely responsible for the workplace’s present role as the main supplier of health insurance.
The war produced much of this as wage limitations were in force but fringe benefits, like health insurance, were permitted. A lot of this history is contained in Paul Starr’s book The Social Transformation of American Medicine.
From the first, commercial insurers focused on employer plans while Blue Cross and Blue Shield (which was founded by the California Medical Association to pay doctor bills) were individual plans.
In 1954, Social Security coverage included disability benefits for the first time, and in 1965, Medicare and Medicaid programs were introduced, in part because of the Democratic majority in Congress. In the 1970s and 1980s, more expensive medical technology and flaws in the health care system led to higher costs for health insurance companies. Responding to higher costs, employee benefit plans changed into managed care plans, and Health Maintenance Organizations (HMOs) emerged. Managed care plans are unique in that they involve a particular network of healthcare providers that have been verified for healthcare quality and that have agreements with the insurer about price and related issues. HMOs were originally primarily nonprofit, but they were quickly replaced by commercial interests, and managed care only succeeded in temporarily slowing the growth of healthcare costs.
Two major changes came in the 1970s. In 1978, the federal government established what were called Professional Standards Review Organizations or PSRO. All doctors had to receive training in how to do these reviews and it was immediately apparent that cost was the only consideration, not quality of care.
I decided to educate myself and took a course from an organization called “The American Board of Quality Assurance and Utilization Review Physicians. I took the exam and passed, then attended the annual meeting. This was about 1986. People I met at that meeting informed me that the exams were graded by throwing them up in the air. Any that landed balancing on one edge were flunked. Nonetheless, the experience was valuable because I could see what was coming.
I was president of the Orange County Medical Association that year and had served for eight years on the Commission on Legislation of the CMA, now called The Council on Legislation. This gave me an opportunity to meet many legislators, many state level and some federal. The impression they made on me was that few knew anything about medicine and most were not very intelligent.
Posted by Michael Kennedy on 4th November 2013 (All posts by Michael Kennedy)
The political left is trying very hard as can be seen here.
It’s kind of complicated so I will summarize. You are screwed !
There are accusations that insurance companies are using this to drop high risk subscribers. Maybe that is true but it is the consequence of ignorant people designing Obamacare. Did these guys ever set up a new business ? As Casey Stengel once said to the Mets , “”Can’t anybody here play this game?”
I guess not.
We are also told that “in all the furor, people forget how terrible many of the soon-to-be-abandoned policies were. Some had deductibles as high as $10,000 or $25,000 and required large co-pays after that, and some didn’t cover hospital care.” Never mind that we have seen cancellations of insurance policies with deductibles much lower, and customers forced to purchase replacement policies with higher deductibles, and with premium increases of 100%, if not higher.
Then there is this argument.
Why can’t people opt out of mental health coverage if there is not a reasonable chance that they will need that coverage? Why can’t they get mental health coverage when it is needed? After all, pre-existing conditions can no longer be denied, so in the event that mental health coverage is needed down the line, it can be obtained and the insurance companies cannot deny people who already have pre-existing mental health conditions. The Times assures us that over-coverage–and the high premiums that come with it–is “one price of moving toward universal coverage with comprehensive benefits.” They don’t explain why having unnecessary coverage is a step towards social justice, but as we saw from the beginning of this intelligence-insulting, repulsively dishonest op-ed, the New York Times is less about explaining, and more about covering up a disastrous rollout with disastrous policy consequences for the country.
Peggy Noonan, who has frustrated me with her obtuseness at times, gets it now.
Politically where are we right now, at this moment?
We have a huge piece of U.S. economic and social change that debuted a month ago as a program. The program dealt with something personal, even intimate: your health, the care of your body, the medicines you choose to take or procedures you get. It was hugely controversial from day one. It took all the political oxygen from the room. It failed to garner even one vote from the opposition when it was passed. It gave rise to a significant opposition movement, the town hall uprisings, which later produced the tea party. It caused unrest. In fact, it seemed not to answer a problem but cause it. I called ObamaCare, at the time of its passage, a catastrophic victory—one won at too great cost, with too much political bloodshed, and at the end what would you get? Barren terrain. A thing not worth fighting for.
So the program debuts and it’s a resounding, famous, fantastical flop. The first weeks of the news coverage are about how the websites don’t work, can you believe we paid for this, do you believe they had more than three years and produced this public joke of a program, this embarrassment?
She assumed that it wasn’t worth it if it worked !
The problem now is not the delivery system of the program, it’s the program itself. Not the computer screen but what’s inside the program. This is something you can’t get the IT guy in to fix.
They said if you liked your insurance you could keep your insurance—but that’s not true. It was never true! They said if you liked your doctor you could keep your doctor—but that’s not true. It was never true! They said they would cover everyone who needed it, and instead people who had coverage are losing it—millions of them! They said they would make insurance less expensive—but it’s more expensive! Premium shock, deductible shock. They said don’t worry, your health information will be secure, but instead the whole setup looks like a hacker’s holiday. Bad guys are apparently already going for your private information.
This is the worst that could be imagined.
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…said Richard Nixon, famously. Comes now Joe Biden, with “I am not a geek.” Specifically, in responding to questions about the problems with the Obamacare website and its supporting systems, Biden said:
“Neither (the president) or I are technology geeks and we assumed that it was up and ready to run.”
I don’t think the main problems with this implementation have to do with a lack of geekitude–most likely, there are many quite competent software developers working on this project–but rather with a lack of effective management. (And if there is a shortage of competent developers on the project, well, that’s a management issue, too, isn’t it.)
Real managers, real executives, don’t assume that important things will be ready when they’re supposed to be ready, and they aren’t satisfied with superficial answers to superficial questions, either. These effective leaders are people who have developed effective questioning skills so they can find out what is really going on. They establish open, non-fear-based organizational cultures so that people with concerns feel able to bring them forward. As I noted in my post about Benghazi (excusing failure by pleading incompetence), it is the responsiblity of an executive to establish an information and decision-flow architecture…including clear assignment of responsibilities…to ensure that the right things are seen and acted upon by the right people at the right time. Failure to do this..and to maintain and tune the system over time…will predictably result in catastrophes.
Later in the interview with Biden, the Vice President also said he didn’t know the specifics of why the website isn’t working, but that he was told the platform “is fine, but they have to change an awful lot of the inputs.”
“Look, all I know is they talk about 50,000 lines of this and this, I don’t know the technical reasons,” Biden said.
”So I don’t know, I wish I could tell you, that’s why I became a lawyer,”
A pretty flippant response to a serious situation. Slow Joe might not be able to understand the technical reasons for the failure, but he should be able–if he were competent at his job–to investigate and understand the management reasons for the failure.
Some of the questions that come to mind about this debacle are: How were the contractors selected? Why was it decided to have the government (CMS) act as prime contractor, rather than choosing an external company for that role? What do the contracts with the outside contractors actually specify, in terms of deliverables? What remedies are provided in the contracts for failures in delivery? If these remedies are inadequate, why did the government not require that they be more stringent? What coordination vehicles were there between the government group writing and interpreting the Obamacare regulations and the separate group that was attempting to act as prime contractor? Was there a single individual in charge? What project scheduling and tracking methods were employed throughout this effort?
These are not issues that are specific to software technology–the above questions are ones that any good executive, whether his background is in construction or in theater or in wholesale distribution, would understand that he should ask.
A United States President is not elected as a philosopher king; he is elected to run the executive departments of government and to faithfully execute the laws passed by Congress. The members of the present administration have repeatedly demonstrated their utter incompetence to perform these tasks.
An administration that seeks endless expansion of government’s role–but is at the same time completely incompetent at carrying out basic executive tasks–will drive expanding circles of chaos throughout ever-broader reaches of American society and the American economy.
Posted by Michael Kennedy on 1st November 2013 (All posts by Michael Kennedy)
Fernandez begins with a discussion of Obama’s technique with favored columnists.
get him in an off-the-record setting with a small group of opinion columnists — the David Brooks and E.J. Dionne types — and he’ll talk for hours. …
“It’s not an accident who he invites: He reads the people that he thinks matter, and he really likes engaging those people,” said one reporter with knowledge of the meetings. “He reads people carefully — he has a columnist mentality — and he wants to win columnists over,” said another. …
These people are, like him, unsophisticated in technology. They are lawyers or journalists and the numbers of math and science courses represented in the room are few.
The other blog post is titled “Government is magic.”
Our technocracy is detached from competence. It’s not the technocracy of engineers, but of “thinkers” who read Malcolm Gladwell and Thomas Friedman and watch TED talks and savor the flavor of competence, without ever imbibing its substance.
These are the people who love Freakonomics, who enjoy all sorts of mental puzzles, who like to see an idea turned on its head, but who couldn’t fix a toaster.
This strikes me as a huge insight into why this administration doesn’t understand the trouble it is in.
…and the Obama Administration is having a worse than “Hurricane Katrina” class credibility meltdown unseen in the West since Israeli Prime Minister Ehud Olmert’s political collapse in July 2008.
Health and Human Services Secretary Kathleen Sebelius made the outrageously untrue statement in Congressional hearings today about the Affordable Care Act (Obamacare) that: ‘The website has never crashed.’
As this Instapundit link makes clear that the split screen between her testimony and objective reality is well into the Muhammad Saeed al-Sahhaf AKA “Baghdad Bob” territory in terms of “Who are you going to believe, me? Or your lying eyes?”
The bottom line of Pres. Obama’s spokesman for his signature achievement as President getting laughed at as a Democratic Party version of “Baghdad Bob” is a “Pres. George W. Bush after Hurricane Katrina” moment.
The Obama Administration’s credibility on domestic policy is now as crippled as his foreign policy was after his Syrian Nerve Gas “Red Line” misadventure. It is all downhill from here.
The final fate of Israeli Prime Minister Ehud Olmert now awaits Pres. Obama.
Posted by Michael Kennedy on 28th October 2013 (All posts by Michael Kennedy)
The latest meme I’ve noticed on the Obamacare implosion is that the Republicans are to blame. After all, it’s Romneycare, or it’s the idea of the Heritage Foundation.
In fact, the mandate was promoted by Hillary in 2008 and opposed by Obama. Of course, he doesn’t know much about what is going on so we can understand. In fact, the entire website fiasco, slipped by him, unnoticed.
President Barack Obama didn’t know of problems with the Affordable Care Act’s website — despite insurance companies’ complaints and the site’s crashing during a test run — until after its now well-documented abysmal launch, the nation’s health chief told CNN on Tuesday.
David Remnick, editor of The New Yorker, quotes White House senior adviser and longtime Obama friend Valerie Jarrett: “I think Barack knew that he had God-given talents that were extraordinary. He knows exactly how smart he is. … He knows how perceptive he is. He knows what a good reader of people he is. And he knows that he has the ability — the extraordinary, uncanny ability — to take a thousand different perspectives, digest them and make sense out of them, and I think that he has never really been challenged intellectually. … So what I sensed in him was not just a restless spirit but somebody with such extraordinary talents that had to be really taxed in order for him to be happy. … He’s been bored to death his whole life. He’s just too talented to do what ordinary people do.”
Oh well, at least we know if we really get in trouble, we have someone who can bail us out. I don’t doubt the comment about him never being challenged intellectually.
My profession is much in the news at the moment, so I thought I would pass along such insights as I have from my career, mostly from a multibillion-dollar debacle which I and several thousand others worked on for a few years around the turn of the millennium. I will not name my employer, not that anyone with a passing familiarity with me doesn’t know who it is; nor will I name the project, although knowing the employer and the general timeframe will give you that pretty quickly too.
We spent, I believe, $4 billion, and garnered a total of 4,000 customers over the lifetime of the product, which was not aimed at large organizations which would be likely to spend millions on it, but at consumers and small businesses which would spend thousands on it, and that amount spread out over a period of several years. From an economic transparency standpoint, therefore, it would have been better to select 4,000 people at random around the country and cut them checks for $1 million apiece. Also much faster. But that wouldn’t have kept me and lots of others employed, learning whatever it is we learn from a colossally failed project.
So, a few things to keep in mind about a certain spectacularly problematic and topical IT effort:
This thing would be a case study for the next couple of decades if it weren’t going to be overshadowed by physically calamitous events, which I frankly expect. In another decade, Gen-X managers and Millennial line workers, inspired by Boomers, all of them much better at things than they are now, “will be in a position to guide the nation, and perhaps the world, across several painful thresholds,” to quote a relevant passage from Strauss and Howe. But getting there is going to be a matter of selection pressures, with plenty of casualties. The day will come when we long for a challenge as easy as reorganizing health care with a deadline a few weeks away.
Posted in Big Government, Book Notes, Commiserations, Current Events, Customer Service, Health Care, Internet, Law, Medicine, Personal Narrative, Politics, Predictions, Systems Analysis, Tech, USA | 6 Comments »
Posted by Michael Kennedy on 23rd October 2013 (All posts by Michael Kennedy)
UPDATE: I posted this as much for myself as for others to read. Today, Peggy Noonan weighs in. In case this is behind the paywall, here is her conclusion.
Even though it’s huge, and those who are reporting the story every day are, by and large, seasoned and have seen a few things, no one seems to know how it will end. Because it’s new territory. Does anyone believe the whole technological side can be fixed quickly? No. The president may eventually accept a brief delay in implementation—it is almost unbelievable that he will not—but does anyone think that the economics of the ACA, the content as set out and expressed on the sites, will flow smoothly, coherently, and fully satisfy the objectives of expanding health-insurance coverage while lowering its cost? You might believe that, but early reports of sticker shock, high deductibles and cancelled coverage are not promising. Does anyone think the president will back off and delay the program for enough time not only to get the technological side going but seriously improve the economics? No. So we’re not only in the middle of a political disaster, we’re in the middle of a mystery. What happens if this whole thing continues not to work? What do we do then?
This is the Titanic, folks.
I have watched the failed rollout of Obamacare this past three weeks and wondered where it was going. I have some suspicions. There is a lot of talk about delaying the individual mandate, as Obama did with the employer mandate. Megan McArdle has a post on this today. I think it is too late to fix or delay Obamacare.
With Nov. 1 storming toward us and the health insurance exchanges still not working, we face the daunting possibility that people may not be able to sign up for January, or maybe even for 2014. The possibility of a total breakdown — the dreaded insurance death spiral — is heading straight for us. The “wait and see if they can’t get it together” option no longer seems viable; we have to acknowledge that these problems are much more than little glitches, and figure out what to do about them.
She has already described the insurance death spiral. I think it is here.
Am I exaggerating? I know it sounds apocalyptic, but really, I’m not. As Yuval Levin has pointed out, what we’re experiencing now is the worst-case scenario for the insurance markets: It is not impossible to buy insurance, but merely very difficult. If it were impossible, then we could all just agree to move to Plan B. And if it were as easy as everyone expected, well, we’d see if the whole thing worked. But what we have now is a situation where only the extremely persistent can successfully complete an application. And who is likely to be extremely persistent?
Very sick people.
People between 55 and 65, the age band at which insurance is quite expensive. (I was surprised to find out that turning 40 doesn’t increase your premiums that much; the big boosts are in the 50s and 60s.)
Very poor people, who will be shunted to Medicaid (if their state has expanded it) or will probably go without insurance.
Levin points out: It is now increasingly obvious to them that this is simply not how things work, that building a website like this is a matter of exceedingly complex programming and not “design,” and that the problems that plague the federal exchanges (and some state exchanges) are much more severe and fundamental than anything they imagined possible. That doesn’t mean they can’t be fixed, of course, and perhaps even fixed relatively quickly, but it means that at the very least the opening weeks (and quite possibly months) of the Obamacare exchanges will be very different from what either the administration or its critics expected.
The insurance industry is already reacting to Obamacare and this will quickly become irreversible. This article is from September.
IBM, Time Warner, and now Walgreens have made headlines over the past two weeks by announcing that they plan to move retirees (IBM, Time Warner) and current employees (Walgreens) into private health insurance exchanges with defined contributions from employers.
The article calls it “maybe a good thing” but that supposes the exchanges will function. What if they don’t for a year or more ? What will health care look like in November 2014 ?
What happens next — as we’ve seen in states such as New York that have guaranteed issue, no ability to price to the customer’s health, and a generous mandated-benefits package — is that when the price increases hit, some of those who did buy insurance the first year reluctantly decide to drop it. Usually, those are the healthiest people. Which means that the average cost of treatment for the people remaining in the pool rises, because the average person in that pool is now sicker. So premiums go up again . . . until it’s so expensive to buy insurance that almost no one does.
Will that be apparent a year from now ? I’m sure the administration, and the Democrats, will do almost anything to avoid that. What can they do ? They’ve already ignored the law to delay the employer mandates. It’s too late to delay the individual mandate because individual policies are being cancelled right now.
Posted by Michael Kennedy on 14th October 2013 (All posts by Michael Kennedy)
I hadn’t thought of this situation, only because I didn’t have enough imagination to see that politics trumps all with Obama.
A growing consensus of IT experts, outside and inside the government, have figured out a principal reason why the website for Obamacare’s federally-sponsored insurance exchange is crashing. Healthcare.gov forces you to create an account and enter detailed personal information before you can start shopping. This, in turn, creates a massive traffic bottleneck, as the government verifies your information and decides whether or not you’re eligible for subsidies. HHS bureaucrats knew this would make the website run more slowly. But they were more afraid that letting people see the underlying cost of Obamacare’s insurance plans would scare people away.
This just didn’t occur to me. It should have. After all, what was Benghazi about ?
This political objective—masking the true underlying cost of Obamacare’s insurance plans—far outweighed the operational objective of making the federal website work properly. Think about it the other way around. If the “Affordable Care Act” truly did make health insurance more affordable, there would be no need to hide these prices from the public.
It is just amazing that the politicians know so little about technology (this was the guy with the Blackberry who made fun of McCain) that they did not understand that saying something doesn’t make it happen.