Politics

Alternatives to Obamacare

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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 ?

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Teaching in a black majority high school

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This essay has been around for a while but I saw it for the first time today. It is powerful but depressing. I wonder how applicable it is to the Chicago school system? I have a nephew who has a step daughter in a public school that is about half black. Her mother has to go to the school about once a week to complain about bullying. Catholic schools’ tuition is far higher than it was when I lived there.

Here it is.

A few excerpts: Until recently I taught at a predominantly black high school in a southeastern state.

The mainstream press gives a hint of what conditions are like in black schools, but only a hint. Expressions journalists use like “chaotic” or “poor learning environment” or “lack of discipline” do not capture what really happens. There is nothing like the day-to-day experience of teaching black children and that is what I will try to convey.

Most whites simply do not know what black people are like in large numbers, and the first encounter can be a shock.

One of the most immediately striking things about my students was that they were loud. They had little conception of ordinary decorum. It was not unusual for five blacks to be screaming at me at once. Instead of calming down and waiting for a lull in the din to make their point — something that occurs to even the dimmest white students — blacks just tried to yell over each other.

This must be an impossible place to try to teach. Are there any kids who want to learn?

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What is a conservative ?

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Right now we have the immigration bill that has been passed by the Senate after being written by the “Gang of 8.” This bill, like so many major pieces of legislation lately, was written in secrecy and has not been through the usual committee process. “We have to pass it to see what is in it.”

As if Obamacare were not enough, here we have another opaque and mysterious bit of legislation that is thousands of pages of incomprehensible legalese.

Jennifer Rubin weighs in with a rather beltway-oriented view. Fair enough as she writes in the Washington Post.

The immigration battle, the debate over U.S. involvement in Syria and the flap over NSA surveillance have suggested two starkly different visions of the GOP as well as two potential paths for the GOP.

The question remains whether the GOP will become the party of: Sen. Rand Paul, Ky., or Sen. Kelly Ayotte, N.H., on national security; The Gang of Eight or the Gang of Three (Sens. Mike Lee, Ted Cruz and Jeff Sessions) on immigration; Sen. Rob Portman, Ohio, or Rick Santorum on gay marriage; Broad-based appeal (e.g. Govs. Chris Christie, Gov. Scott Walker) or losing ideologues (Sharron Angle, Christine O’Donnell, Michele Bachmann). I don’t know that Angle and O’Donnell were “ideologues.” Angle, at least was an amateur, somewhat like other candidates supported by the Tea Party.

I’m not sure I agree with her choices but let’s think about it.

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Institutions, Instruments, and the Innovator’s Dilemma

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I have written several posts that use Carroll Quigley’s “institutional imperative” as a lens for understanding contemporary events. [1] Mr. Quigley suggests that all human organizations fit into one of two types: instruments and institutions. Instruments are those organizations whose role is limited to the function they were designed to perform. (Think NASA in the 1960s, defined by its mission to put a man on the moon, or the NAACP during the same timeframe, instrumental to the civil rights movement.) Institutions, in contrast, are organizations that exist for their own state; their prime function is their own survival.

Most institutions start out as instruments, but as with NASA after the end of the Cold War or the NAACP after the victories of the civil rights movement, their instrumental uses are eventually eclipsed. They are then left adrift, in search of a mission that will give new direction to their efforts, or as happens more often, these organizations begin to shift their purpose away from what they do and towards what they are. Organizations often betray their nature when called to defend themselves from outside scrutiny: ‘instruments’ tend to emphasize what their employees or volunteers aim to accomplish; ‘institutions’ tend to emphasize the importance of the heritage they embody or even the number of employees they have.

Mr. Quigley’s institutional imperative has profound implications for any democratic society especially a society host to so many publicly funded organizations as ours. Jonathan Rauch’s essay, “Demosclerosis” is the best introduction to the unsettling consequences that come when public organizations transform from instruments into institutions. [2] While Mr. Rauch does not use the terminology of the Institutional Imperative, his conclusions mesh neatly with it. Describing the history and growth of America’s bureaucratic class, Mr. Rauch suggests its greatest failing: a bureaucracy, once created, is hard to get rid of. To accomplish whatever mission it was originally tasked with a bureaucracy must hire people. It must have friends in high places. The number of people who have a professional or economic stake in the organization’s survival grows. No matter what else it may do, it inevitably becomes a publicly sponsored interest group. Any attempt to reduce its influence, power, or budget will be fought against with ferocity by the multitude of interests who now depend on it. Even when it becomes clear that this institution is no longer an instrument, the political capital needed to dismantle it is just too high to make the attempt worth a politician’s time or effort. So the size and scope of bureaucracies grow, encumbering the country with an increasing number of regulations it cannot change, employees it does not need, and organizations that it cannot get rid of.

I used to think that the naked self-interest described by Mr. Rauch was the driving force behind the Institutional Imperative. It undoubtedly plays a large role (particularly when public funds are involved), but there are other factors at play. One of the most important of these is what business strategists call Marginal Thinking.

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Who benefits from Immigration ?

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The British seem to be discovering something about immigration that was obvious to many of us on this side of the Atlantic a long time ago.

documented immigrant

The release of a previously unseen document suggested that Labour’s migration policy over the past decade had been aimed not just at meeting the country’s economic needs, but also the Government’s “social objectives”.

The paper said migration would “enhance economic growth” and made clear that trying to halt or reverse it could be “economically damaging”. But it also stated that immigration had general “benefits” and that a new policy framework was needed to “maximise” the contribution of migration to the Government’s wider social aims.

The Government has always denied that social engineering played a part in its migration policy.

However, the paper, which was written in 2000 at a time when immigration began to increase dramatically, said controls were contrary to its policy objectives and could lead to “social exclusion”.

Imagine that !

Last night, the Conservatives demanded an independent inquiry into the issue. It was alleged that the document showed that Labour had overseen a deliberate open-door ­policy on immigration to boost multi-culturalism.

Voting trends indicate that migrants and their descendants are much more likely to vote Labour.

The existence of the draft policy paper, which was drawn up by a Cabinet Office think tank and a Home Office research unit, was disclosed last year by Andrew Neather, a former adviser to Tony Blair, Jack Straw and David Blunkett.

He alleged at the time that the sharp increase in immigration over the past 10 years was partly due to a “driving political purpose: that mass immigration was the way that the Government was going to make the UK truly multi-cultural”.

Yet Marco Rubio assures us that the new immigrant citizen will vote for Republicans out of gratitude.

Sir Andrew Green, the chairman of Migrationwatch, said the document showed that Mr Neather, who claimed ministers wanted to radically change the country and “rub the Right’s nose in diversity”, had been correct in his account of Labour’s immigration policy.

It’s too late for the Brits, as we see.

What does our future hold ? Of course, our new immigrants don’t use meat cleavers.