Bruce Webster writes about the parallels (and differences) between the design of legislation and the design of software systems.
(via a thread at Bookworm)
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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.
Read the rest of this entry »
…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.
For all the times that this federal government shutdown repeated fiscal game of chicken has been played – and I have been through this rodeo a number of times – it’s the sheer, petty spitefulness of this iteration which has raised my hackles. Barrycading off the open-air monuments along the Mall – including the WWII and Vietnam War monuments – blocking off scenic overlooks and the parking lots at Mt. Vernon, and forcing the closure of a number of otherwise self-supporting attractions which have the ill-luck to be on federally-owned property. I am glad to know that the governor of Wisconsin is telling the feds to go pound sand, and suspect that the governor of Arizona may be coming close to doing so, likewise. Meanwhile, the commissary at Andrews AFB is closed, and the golf course is open. Yes, I know that they are under different funding organizations, but the optics of this are really, really bad. If this were a Republican administration, I suspect we’d be hearing all about it, with video and stills of tearful and hungry military dependents all over the news, but then if my aunt had testicles, she would be my uncle. For all I know the junior enlisted troops are happily shopping at Wally-world and the generic shelves at the local grocery stores and not missing the commissary very much at all … but knowing that President Barrycade likes to golf there and takes every opportunity to do so … really, as I said – bad optics.
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I’ve reviewed two books by German writer Hans Fallada: Little Man, What Now?, and Wolf Among Wolves (the links go to the reviews), both of which were excellent. I recently finished his novel Every Man Dies Alone, which is centered on a couple who become anti-Nazi activists after their son Ottochen is killed in the war…it was inspired by, and is loosely based on, the true story of a real-life couple who distributed anti-Nazi postcards and were executed for it.
I thought this book was also excellent…the present post, though, is not a book review, but rather a development of some thoughts inspired by a particular passage in the story.
Trudel, who was Ottochen’s fiancee, is a sweet and intelligent girl who is strongly anti-Nazi..and unlike Ottochen’s parents, she became an activist prior to being struck by personal tragedy: she is a member of a resistance cell at the factory where she works. But she finds that she cannot stand the unending psychological strain of underground work–made even worse by the rigid and doctrinaire man (apparently a Communist) who is leader of the cell–and she drops out. Another member of the cell, who has long been in love with her, also finds that he is not built for such work, and drops out also.
After they marry and Trudel becomes pregnant, they decide to leave the politically hysterical environment of Berlin for a small town where–they believe–life will be freer and calmer.
Like many city dwellers, they’d had the mistaken belief that spying was only really bad in Berlin and that decency still prevailed in small towns. And like many city dwellers, they had made the painful discovery that recrimination, eavesdropping, and informing were ten times worse in small towns than in the big city. In a small town, everyone was fully exposed, you couldn’t ever disappear in the crowd. Personal circumstances were quickly ascertained, conversations with neighbors were practically unavoidable, and the way such conversations could be twisted was something they had already experienced in their own lives, to their chagrin.
Reading the above passage, I was struck by the thought that if we are now living in an “electronic village”…even a “global village,” as Marshall McLuhan put it several decades ago…then perhaps that also means we are facing some of the unpleasant characteristics that–as Fallada notes–can be a part of village life. And these characteristics aren’t something that appears only in eras of insane totalitarianism such as existed in Germany during the Nazi era. Peter Drucker, in Managing in the Next Society, wrote about the tension between liberty and community:
Rural society has been romanticized for millenia, especially in the West, where rural communities have usually been portrayed as idylic. However, the community in rural society is actually both compulsory and coercive…And that explains why, for millenia, the dream of rural people was to escape into the city. Stadluft macht frei (city air frees) says an old German proverb dating back to the eleventy or twelfth century.
Posted by Michael Kennedy on 15th August 2013 (All posts by Michael Kennedy)
My sentiments on the whole drug question have been influenced by some experience with the medical aspect of the problem. Drugs are slipping out of any control due to developments in synthetic variations of older substances that stimulate brain chemistry, sometimes in unknown ways. The traditional drugs, if we can use that term, are also slipping out of control with Mexican drug wars replacing the Columbian cartels even more violent than their predecessors.
What about marijuana ? It is widely used by the younger generation and, while I do think there are some harmful consequences, especially in potential schizophrenics, the fact is that the laws are widely ignored and do little good and much harm. First, what about the link to psychosis ?
Epidemiological studies suggest that Cannabis use during adolescence confers an increased risk for developing psychotic symptoms later in life. However, despite their interest, the epidemiological data are not conclusive, due to their heterogeneity; thus modeling the adolescent phase in animals is useful for investigating the impact of Cannabis use on deviations of adolescent brain development that might confer a vulnerability to later psychotic disorders. Although scant, preclinical data seem to support the presence of impaired social behaviors, cognitive and sensorimotor gating deficits as well as psychotic-like signs in adult rodents after adolescent cannabinoid exposure, clearly suggesting that this exposure may trigger a complex behavioral phenotype closely resembling a schizophrenia-like disorder. Similar treatments performed at adulthood were not able to produce such phenotype, thus pointing to a vulnerability of the adolescent brain towards cannabinoid exposure.
This suggests that adult use may be less harmful.
Posted by Michael Kennedy on 26th July 2013 (All posts by Michael Kennedy)
As Obamacare looks more and more as though it will collapse, there are some alternatives beginning to appear. Several years ago, I suggested using the French system as a model. At the time, the French system was funded by payroll deduction, a source affected by high unemployment, and used a national negotiated fee schedule which was optional for doctors and patients. The charges had to be disclosed prior to treatment and the patient had the option of paying more for his/her choice of physician. Privately owned hospitals competed with government hospitals and patient satisfaction was the highest in Europe.
Recently the French system has run into trouble.
French taxpayers fund a state health insurer, “Assurance Maladie,” proportionally to their income, and patients get treatment even if they can’t pay for it. France spends 11% of national output on health services, compared with 17% in the U.S., and routinely outranks the U.S. in infant mortality and some other health measures.
The problem is that Assurance Maladie has been in the red since 1989. This year the annual shortfall is expected to reach €9.4 billion ($13.5 billion), and €15 billion in 2010, or roughly 10% of its budget.
This may be due to several factors. The French economy is in terrible shape with high unemployment. More of the funding for the health plan is coming from general revenues. This was not how it was supposed to work. It was payroll funded, much as the German system is, with a wider source than individual employers. This allows mobility for employees and allows employers to distribute risk among a larger pool. Germany allows other funding sources such as towns and states. I think it is still a good model for us but, with the passage of Obamacare, it will take a generation before another large reform would be viable. Obamacare must stand or fall first and I think it will fall but, as in most government programs, it takes years before the sponsors will admit defeat.
Another proposal has been made by a serious study group.
1. The government should offer every individual the same, uniform, fixed-dollar subsidy, whether used for employer-provided or individual insurance. For everyone with private health insurance, the subsidy would be realized in the form of lower taxes by way of a tax credit. The credit would be refundable, so that it would be available to individuals with no tax liability.
2. Where would the federal government get the money to fund this proposal?
We could begin with the $300 billion in tax subsidies the government already “spends” to subsidize private insurance. Add to that the money federal, state and local governments are spending on indigent care. For the remainder, the federal government could make certain tax benefits conditional on proof of insurance. For example, the $1,000 child tax credit could be made conditional on proof of insurance for a child.10 For middle-income families, a portion of the standard deduction could be made conditional on proof of insurance for adults. For lower-income families, part of the Earned Income Tax Credit could be conditioned on obtaining health coverage.
3. If the individual chose to be uninsured, the unclaimed tax relief would be sent to a safety net agency providing health care to the indigent in the community where the person lives, so that it would be available there in case he generates medical bills he cannot pay from his own resources. The result would be a system under which the uninsured as a group effectively pay for their own care, without any individual or employer mandate. By the very act of turning down the tax credit for health insurance in choosing not to insure, uninsured individuals would pay extra taxes equal to the average amount of the free care given annually to the uninsured. The subsidies for the insurance purchased by the insured would then effectively be funded by the reduction in expected free care the insured would have consumed if uninsured. [See Figures II and III.]
The paper goes on to explain the proposal The trouble is that this is another major reform and I see no chance for it in the foreseeable future.
What then is the most likely development ?
Over the week end of May 18-19 2013 the Obama Administration official Dan Pfeiffer went out and spun the IRS scandal saying “The law is irrelevant”. On the contrary, the law is very much relevant to the IRS scandal, including prohibitions against specific acts by IRS personnel and more general laws of which the ones to watch concern private civil actions for damages under the federal Racketeering, Influence and Corrupt Organizations (RICO) Act (18 USC 1961, et seq.) and Civil Rights Act (42 USC 1983, et seq.). There is every possibility that the victims of the IRS’s suppression of Obama political opponent free speech rights will sue the IRS and individual IRS employees under the civil rights and civil RICO laws for a $150-to-$650 million legal payday.
Remember, _THE IRS CONFESSED_. There is no argument that it admitted some of its actions concerning Tea Party organization tax-exempt applications were unlawful, i.e.., illegal. It is obvious that the IRS and its staff engaged in an organized multi-work unit, multi-state, plus Washington DC Headquarters, wide conspiracy to suppress the Tea Party. The IRS unlawfully applied special rules to Tea Party applicants that it did not to others and that conspiracy prevented them from exercising their free speech rights for the 2010 and 2012 election cycles.
It also is very clear that the IRS — via the questions it was asking the Tea Party and other religious non-profits — was busy creating a quite extensive Nixonian/Ailinskyite ENEMIES LIST for future use in intimidation and the depriving Obama Administration political opponents of their Constitutional Rights.
Those are classic CONSPIRACY AGAINST RIGHTS (18 USC 241) and DEPRIVATION RIGHTS UNDER COLOR OF LAW (18 USC 242) violations.
See these criminal federal civil rights statutes, whose violation gives rise to civil liability for damages too:
“Conspiracy Against Rights (18 USC 241)
If two or more persons conspire to injure, oppress, threaten, or intimidate any person in any State, Territory, Commonwealth, Possession, or District in the free exercise or enjoyment of any right or privilege secured to him by the Constitution or laws of the United States, or because of his having so exercised the same; or
If two or more persons go in disguise on the highway, or on the premises of another, with intent to prevent or hinder his free exercise or enjoyment of any right or privilege so secured—
They shall be fined under this title or imprisoned not more than ten years, or both; and if death results from the acts committed in violation of this section or if such acts include kidnapping or an attempt to kidnap, aggravated sexual abuse or an attempt to commit aggravated sexual abuse, or an attempt to kill, they shall be fined under this title or imprisoned for any term of years or for life, or both, or may be sentenced to death.”
“Deprivation Rights Under Color of Law (18 USC 242)
Whoever, under color of any law, statute, ordinance, regulation, or custom, willfully subjects any person in any State, Territory, Commonwealth, Possession, or District to the deprivation of any rights, privileges, or immunities secured or protected by the Constitution or laws of the United States, or to different punishments, pains, or penalties, on account of such person being an alien, or by reason of his color, or race, than are prescribed for the punishment of citizens, shall be fined under this title or imprisoned not more than one year, or both; and if bodily injury results from the acts committed in violation of this section or if such acts include the use, attempted use, or threatened use of a dangerous weapon, explosives, or fire, shall be fined under this title or imprisoned not more than ten years, or both;
and if death results from the acts committed in violation of this section or if such acts include kidnapping or an attempt to kidnap, aggravated sexual abuse, or an attempt to commit aggravated sexual abuse, or an attempt to kill, shall be fined under this title, or imprisoned for any term of years or for life, or both, or may be sentenced to death.”
That is the criminal side of things.
The problem AG Holder is going to suffer obstructing discovery in civil rights and civil RICO lawsuits against the IRS is that criminal prosecutions and civil suits for damages proceed in tandem. The civil suits aren’t stayed by criminal prosecutions on the same subject, let alone by criminal “investigations” short of prosecutions.
The IRS “Special Group’s” delay of tax exempt status prevented Tea Party NGO’s from fund raising and participating in two political cycles (2010 and 2012) by educating “low information voters” as to the political issues of the day, like the National Rifle Association does. The NGO’s whose applications for tax-exempt status were slow-rolled can claim “trade and business” damages under Civil RICO provisions of Federal law. And the Supreme Court of the USA decided decades ago that criminal acts by the Federal government “under the color of law” do not qualify for sovereign immunity under the Federal supremacy clause of the constitution.
To quote a lawyer I know –
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Posted by Michael Kennedy on 12th May 2013 (All posts by Michael Kennedy)
Last week was a week for the conspiracy theories. First, we had Benghazi and the hearings which interviewed career State Department officers, most of whom probably vote for Democrats. The fact that they were ordered not to talk to Congressmen and denied any attempt at help when under attack, even from as close as Tripoli, invites speculation about motive. Peggy Noonan, a little unusually, hits this one out of the park.
Since it is behind a pay wall, I’ll quote a few bits.
What happened in Benghazi last Sept. 11 and 12 was terrible in every way. The genesis of the scandal? It looks to me like this:
The Obama White House sees every event as a political event. Really, every event, even an attack on a consulate and the killing of an ambassador.
Because of that, it could not tolerate the idea that the armed assault on the Benghazi consulate was a premeditated act of Islamist terrorism. That would carry a whole world of unhappy political implications, and demand certain actions. And the American presidential election was only eight weeks away. They wanted this problem to go away, or at least to bleed the meaning from it.
That sounds about right to me.
Lawmakers, aides may get Obamacare exemption
Congressional leaders in both parties are engaged in high-level, confidential talks about exempting lawmakers and Capitol Hill aides from the insurance exchanges they are mandated to join as part of President Barack Obama’s health care overhaul, sources in both parties said.
Who could have seen this coming.
The talks — which involve Senate Majority Leader Harry Reid (D-Nev.), House Speaker John Boehner (R-Ohio), the Obama administration and other top lawmakers — are extraordinarily sensitive, with both sides acutely aware of the potential for political fallout from giving carve-outs from the hugely controversial law to 535 lawmakers and thousands of their aides. Discussions have stretched out for months, sources said.
It’s all “extraordinarily sensitive”. I wonder why.
A source close to the talks says: “Everyone has to hold hands on this and jump, or nothing is going to get done.”
Safety in numbers. If this deal goes down it’s a good reason to vote out every member of Congress.
Read the whole thing if you feel inadequately cynical.
This is part of a letter I just sent to my employees:
*In speaking with the owners of (company A) and (company B), both times the conversation turned to health insurance. With the “Obamacare” legislation being passed and coming into effect, we are not only going to be taxed on our current health insurance, but our insurance rates will be skyrocketing, yet again. (other business owner), myself, and the owners of (company A) and (company B) just looked at each other and said – and I quote – “we don’t know what we are going to do”. Note that this is not a political statement in any way, I am simply sharing with you the reality of the situation.
We have always considered “free” health insurance to our employees to be one of the massive benefits we like to provide, but if these increases go through as expected, the model will simply be untenable.
There may be decreased coverage, employee contributions, decreased profit sharing, and/or a combination of all three, or perhaps something else. We are not sure where this will take us, but we will do the best we can to come up with the best solution for everyone. Just be aware that there is a possibility of changes in the future. You will have ample notification and time if and when any changes are made.*
The train is coming down the tracks.