2centsworth.info

The Boston Globe has an article (February 3, 2007 by Rick Klein) entitled Romney distances self from Mass. health plan. Just as GW slunk off to Washington leaving various disasters in Texas, Mitt is doing the same.

As pointed out in the Globe article:

The plan for statewide, near-universal health coverage was the centerpiece of Romney’s administration, and it has become a key part of his presidential resume.

As Democratic legislator Richard Moore pointed out in the article:

“That’s why he left [office] in a hurry,” said Moore, the chairman of the Senate Health Care Financing Committee. “He’s setting himself up so he can go either way. If it’s a success, he’ll take all the credit in the world. If it’s a failure, he’ll blame everybody else.”

Moore said Romney can’t hide the fact that he worked closely with Democrats to craft the law, and his administration was responsible for implementing its early stages. “If it doesn’t work, it’s going to be a shared responsibility,” he said.

One of the ironies of this state-mandated plan is that it will either lead to businesses dropping coverage of their employees… Or the coverage standards (deductibles, services included, etc.) are going to be reduced until you truly have a 2nd-Class-Citizen coverage plan.

According to previous Globe articles, under the current plan, about 200,000 people who are currently insured by their employers are going to be told that their coverage is insufficient and that they are going to be penalized. But are their employers going to pay to have their coverage improved??? All the employers have to do to bail out completely on insuring their employees is pay the state $200 per year per employee… Much less than they are currently paying for their employees current coverage.

To avoid that, the State will almost certainly reduce the coverage requirements (which is what the insurance industry desperately wants) and, yes, you will have true 2nd-Class-Citizen coverage… That isn’t worth the money and that you are required to buy by the State.

Well the citizens of Massachusetts (and, indeed, the State Legislature) are waking up to just what a mess this so-called universal healthcare initiative actually is.

The front page of the Boston Globe (January 27, 2007) has an article talking about the bloated salaries being paid to the administers of this quasi-state agency (the official name is the Commonwealth Health Insurance Connector). The Globe article points out that average salary of the 22 employees is $111,000 and that six of them have higher salaries than the Governor. One of them gets $175k and only works a four day week.

The best spin one can put on this is that these folks are really good at their job and totally dedicated to getting the best deal possible for the State’s citizens. But, as pointed out in an earlier posting, the average cost of this program’s insurance is going to be $380 per month for an individual… This is actually higher than what most citizens could obtain on their own. So why are we paying these bloated salaries?

The answer, as usual in Massachusetts, is that these quasi-state agencies (like the Mass Turnpike Authority and Massachusetts Port Authority) provide lots of well-paid patronage jobs and are virtually unaccountable. And the Commonwealth Health Insurance Connector is turning out to be the same thing.

Just as Medicare Plan D was set up to serve the interests of the big insurers and pharmaceutical companies, the Commonwealth Health Insurance Connect was set up to serve the interests of local commercial health insurance providers. Note that under this plan citizens are going to be required to buy their insurance… And if you cannot afford to buy their coverage, the taxpayers will subsidize the cost of your inadequate coverage. It all means more money for the insurance companies (and six-figure salaries for the Connector administrators).

Not only is the mandated insurance unaffordable, but the actual coverage being offered is unknown. One would think that there should be complete transparency, that one could go to a website and get the details of the coverage being offered. Think again. Even, the 10 member board of directors are apparently in the dark. They don’t seem to have any knowledge of the coverage details, they had no say in who was hired and at what salaries, and, according to the Globe article, they are forbidden to make any public statements about the agency. And Massachusetts State Legislators are also in the dark about this program. Several have been quoted as saying that their requests for information from the agency have stonewalled.

And, remember, Massachusetts citizens are going to required to purchase this insurance. Furthermore, people are being thrown off the Federal Medicaid healthcare program and being required to get this Commonwealth Connector pig-in-a-poke.

The Massachusetts Turnpike Authority was created about 40 years ago to run the tollbooths on the Mass Turnpike and use the revenue to pay off the state bonds that funded the turnpike construction… But those bonds were paid off about 20 years ago and the Turnpike Authority should have been dissolved. But the State Legislature kept it in existence and used it to float more bonds (and then said they had to keep it running to pay off those bonds)… And, of course, it was a good place for politically well-connected folks to get a job. Famously, they had “couriers” who drove packages between various Authority offices that got paid $70k per year.

And, even more famously, it was the Turnpike Authority that was responsible for the colossal mis-management of Boston’s Big Dig; leading to billions of dollars in cost overruns and, ultimately, the death of motorist when a tunnel roof collapsed.

And the Massachusetts Port Authority has a similar track record of patronage, bloated costs, incompetence, and tragedy. Two of airliners that were hijacked on 9/11 flew out of Boston’s Logan Airport. MassPort’s chief of security at the time? It turns out that he was the driver of the previous Republican Governor, Bill Weld. How does one go from being a driver to head of security for an international airport earning a six-figure salary? Well, that’s what these quasi-state agencies have been all about.

So add the Commonwealth Health Insurance Connector to the list… We can only expect more waste, corruption, comedy, and tragedy. It was set up to provide guaranteed revenue for insurers and patronage jobs that can be doled out by the politicians on Beacon Hill.

It is noticeable that even industry lobbyists like John McDonough and key members of the legislature that were responsible for creating this agency are now trying to distance themselves from it.

I absolutely agree that we need a means of providing high quality, affordable healthcare to our citizens at all income levels but this is certainly not the answer.

In today’s (January 20, 2007) Boston Globe there is an article entitled Sticker shock for state care plan talking about the new Massachusetts state-mandated health plan…

State-mandated, to be clear, means that all citizens are going to be required to have state-approved health coverage. If you cannot show that you have state-approved coverage then you will be penalized on your state taxes (there was even talk of having your drivers license revoked).

This plan is supposed to eliminate the state’s population of uninsured people by forcing them to sign up for insurance. Unfortunately, nothing in the plan does anything to make the insurance offered affordable. The underlying agenda is to use the state’s enforcement capability to provide an additional revenue stream to politically well-connected insurance companies.

There is this strange notion that the majority of the uninsured just cannot be bothered buying insurance. In actual fact, the vast majority of folks without insurance simply cannot afford it.

According to the Globe article, the average individual’s monthly cost under the state-mandated plan will be $380 per month. That is about the same monthly cost as I pay for the health insurance I get through my local Chamber of Commerce… And I get the strong impression that the state-mandated coverage will actually cover less than my current coverage.

Of course, what will and will not be covered is rather hard to figure out. The details of the coverage being proposed by the insurers are “secret.” Even State Legislators have been unable to get any details on what is and is not included in the coverage.

It seems from the Globe article that the state panel responsible for setting up the plan was hoping to establish coverage that would cost about 50% of the current norm for commercial coverage (i.e. the mandated insurance would cost about $200 per month for an individual). And the insurance companies were OK with that until they found out they were actually expected to provide at least a minimum level of coverage.

As one of the members of the State panel, MIT Economics Professor Jonathan Gruber, stated, “If we’re going to mandate this, people need to see that they’re getting some value.”

This gets back to a fundamental issue with healthcare policy. Free market capitalism and private enterprise are not the way to go with healthcare. Free market capitalism leads to enormous efficiencies in some areas. Computers and consumer electronics get better and better and cheaper and cheaper each year. But that is because the right market conditions exist.

There are a number of conditions that need to exist to create efficient markets. You need real competition between vendors or providers (which doesn’t exist in the healthcare market), you need the purchasing decisionmaker to be the same individual as the final consumer (which doesn’t exist in the healthcare market), and you need the purchases to be fully knowledgeable about the products or services being provided (which is not the case in the healthcare market), and you need elasticity of demand (which doesn’t exist in the healthcare market).

Competition

In most states there are only 3 or 4 health insurance companies operating. And for the most part they offer similar coverage for similar prices. One of the reasons that healthcare costs keep rising is that no one is trying to keep them under control. The insurance companies are basically skimming a percentage of the revenue that passes through their hands on the way to doctors, hospitals, medical testing companies, and the pharmaceutical industry. The more money flowing through, the higher their profits.

Individuals do not decide who provides their coverage

The vast majority of individuals get their healthcare through their employer. The individuals do not decide which insurance company to use… Their employer’s HR department decides. And the HR department is deciding based on the cost of the plan to the employer, how easy or difficult it is for the HR department to deal with that insurer, etc. Very few individuals decide to accept or reject a job offer based on what health plan the company offers and even fewer would leave a job for that reason. In the end, companies will happily sacrifice individuals coverage in order to save themselves money… Or they will follow the Walmart sweatshop approach and provide lavish coverage for their management personnel and no coverage at all for their rank and file employees.

Lack of transparency

Even the HR departments are largely flying blind when it comes to what is and is not included in a given plan’s coverage (I know, having asked the HR folks at a number of my previous employers). And, as we have seen in today’s Globe article, the people managing this State effort are similarly baffled by the obfuscation tactics and fine print used by the insurance companies.

Elasticity of Demand

In order for a healthy (so-to-speak) free market to exist, buyers need to be able to not buy a product or service if they think it is too expensive. The classic example used in college economics class is “water in the desert.” If you must have something to survive, you will pay any price to get it. The healthcare market is a bit more complicated but, if you have a medical condition that is life threatening or makes you horribly uncomfortable then you are not going to be able to walk away from buying a cure or treatment. In contrast, if that new wide-screen TV is too pricey, you can wait until next year.

Eat your own dogfood

Probably the only way we can make sure that this Mass State mandated plan is providing people with adequate coverage is by mandating that the State Legislators, State Officials, and their families use the plan too. Otherwise, we will be creating a state-mandated 2nd-class-citizen health plan.

And the only way we will reduce costs is when there is complete transparency about what is covered and how it is paid for. With that sort of transparency we have a better chance of streamlining the system and removing waste.

Good places to find out more about this issue are:

www.masscare.org

healthcareformass.org

I read an interesting column in the February 2007 issue of Dr. Dobb’s (a software development journal). The column is by Ed Nisley and he is discussing a report on the problems with electronic voting machines in Cuyahoga County, Ohio during the recent Federal election. The column is entitled Root the Vote: Wetware… It doesn’t seem to be on the Dr. Dobbs website (www.ddj.com) yet but it may show up next month.

I don’t think I have ever talked to someone who is professionally involved with computers or software who isn’t anything but appalled by the idea of purely electronic voting.

As Ed Nisley comments in the column, the current issue is how difficult it is to implement a new voting technology with a temporary once-a-year or once-every-couple-of-years organization largely staffed by volunteers. This years problems were due to poorly designed machines, poor organization, and a lack of training. The issue in the future will be deliberate, subtle, difficult-or-impossible to detect, vote tampering.

In my electoral district we use the “fill in the oval” paper ballots which are then scanned electronically. In my opinion, that is the way to go. Most people are able to figure out how to fill in the ovals, there is a permanent ballot that can be recounted. The thousands of paper ballots would be difficult to alter without its being noticed.

Given the tendency towards dirty tricks in US politics and the generally corrupt relationship between government officials and government contractors, I think purely electronic voting is a recipe for disaster for our democracy…. Just imagine the closed room conversations… “Not only can we guarantee a smoothly run election… For only a few million more we can make sure your guys win!”

If we end up with a significant fraction of the votes being counted in a purely electronic manner then we will also get deliberate biasing in the outcomes. And it will be, essentially, undetectable. You can at least argue about a “hanging chad.”

In fact, the first we will know that there is anything wrong is when some techie gets sufficiently disgusted (or decides he wasn’t paid enough) and we wake up to find we’ve just elected Mickey Mouse president.

Ed Nisley called attention to a recent New York Times article (U.S. Investigates Voting Machines’ Venezuela Ties – October 29, 2006) about the Venezuelan government buying a US company that makes electronic voting machines… That were purchased for use in Venezuela’s elections. Apparently this is being investigated by the Bush administration… One is being asked to believe that a Republican administration is suddenly interested in free and fair elections in South America?

If you want to find out more, check the following links:

Cuyahoga Election Review Panel – Final Report

Election Science Institute – DRE Analysis for May 2006 Primary

Avi Rubin’s blog

VerifiedVoting.org

This is an apolitical public service announcement for everybody that is sick and tire of listening to these automated customer service phone systems (I suspect the irritation transcends all political, religious, ethnic, and racial bounderies!).

Most of us have been confronted by these automated phone systems asking us to press a particular number on the phone keypad depending on which category of disgruntled customer we are. And one frequently finds that your particular beef does not correspond to one of their automated bins… And you really, really want to talk to an actual human being even if he is in some third world country and barely speaks English…. But you have to wade through interminable layers of “Press 5″, “Press 2″, etc. to actually get to a live person.

Somebody has set up a website GetHuman.com which tells you the secret key combinations that allow you to get to speak to an actual person at a lot of large organizations. Actually, that is a little too optimistic… First you will probably hear “We are sorry but all of our associates are assisting other customers at this time but your call is important to us so you just sit there while we play you some elevator music…”

But at least GetHuman.com will help you skip the thicket of keypad options.