Monthly Archives: March 2010

Largest Single American Policy Mistake I Have Witnessed

Today the American Congress passed a socialized medical care bill and sent it to Obama for his signature. This is by far the largest single policy mistake I have ever witnessed in America. It does not require much research to discover that throughout history populism, socializm, leftism, collectiveism (whatever you want to call it) has always led to the ultimate destruction of the societies which partake in such policies. Medical care is a central tenent of modern populist policy thinking and is a universally failed effort, no matter what country you wish to cite as an example. Most such examples touted as “successes” disregard the role the US healthcare model has played in all root medical innovations required by such countries to appear to have successful medical programs. Most people who cite such examples are either Americans who have never lived under such a system (I have) or are non-Americans living under a socialized health regime and do not know what it is like to enjoy the benefits of the American system while enjoying the fruits of research labor which was recouped by American revenues over time.

There are several interesting points to this issue, I will ramble through a few here.

This sort of bill was easy to talk about while the Democrats were in opposition but extremely difficult to actually pass, even with a clear Democratic majority precisely because they know it is a bad idea.

Anything, no matter how fantastic or ridiculous, makes good rhetoric when a party is in opposition because all such parties by definition are powerless to actually follow through with implementation, and therefore immune from the potential effects of any policies they purport to support, no matter how potentially disastrous. The problem with some issues is that they take on a life of their own, which health care in America happened to do. Any bill which will ultimately stifle technological innovation, force a permanent and historically destructive and unrecoverable cost on a government is not something any party wants to be responsible for fifty years down the road.

Pharmaceutical companies do not develop products out of the goodness of their hearts, they create and exploit life-saving innovations for profit, which is precisely why we should continue to support such profit driven aims: because they work. Every big drug company in the world looks to the American market to recoup its development costs. This makes sense as the American economy (~$14 trillion) is several times larger than even the next largest economy (Japan’s at ~$3.9 trillion). The next largest five economies represent huge drops — it is instructive to research this (and I recommend that you do so).

Removing a consumer economy base the size of nearly all the other productive economies combined from the medical research revenue stream will have far larger implications than anyone now seems to appreciate. If a geopolitically irrelevant country such as Venezuela chooses to socialize healthcare and to legalize the looting of intellectual property developed in the US in the interest of making its government-subsidized generic product and medical services sector competitive, that is a loss of far less than 1% from the revenue stream. Removing the entire American system from the same system in actuality kills it completely. This is a frightening thing, not just for the drug companies (who are owned by smart businessmen who will simply move on to other smart business ideas and more fruitful sectors) but is an even more frightening thing for countries such as Venezuela who have absolutely no hope of finding any other place so replete with useful lifesaving technologies to steal. Though I use the clearly failed example of socializm that is Venezuela to illustrate my point, this is actually (and even more frighteningly) true for countries commonly thought to be the socialized medical model we should emulate: France, Canada, Japan and Germany.

In fact, I live in Japan under a socialized health care system. I am compelled to pay national health insurance. And guess what? The national health care system is broke. Dead broke. Red. Bankrupt. Of course, money still grows on that tree, but it’s fake money void of value, capable only of inflating the actual costs of everything around me that is not healthcare related by sucking adjacent markets dry and overtaxing me. All that negative effect and health care actually is more expensive for me and worse than private health care was on a common-case basis in the US.

Example: I had strep throat about a year ago while I was still filming the Fast Food Fighter experiment. I went to the doctor. I waited for four hours in a full waiting room on a Tuesday afternoon (yes, when people are working — the place was full of old people who don’t even have anything wrong, they just go to the doctor out of habit, because they sort of can). He swabbed my throat and told me he would have the results back in three days. Three days. The cost of the exam was 4,000 yen (about $40), the cost of the test was another 3,000, and when I came back my prescription included four different drugs for a total of another 5,000 yen (three of which were completely worthless but are standard fare in the world of socialized Japanese healthcare). These were the costs to me, mind you, not the costs to the insurance “company”. I only have to pay between 20 and 25% depending on the case, so the actual bill was insanely higher than this. Not to mention that the only functional drug that I needed was the antibiotic which does the job of actually killing the bacteria in my system, the other three were just fluff which is prescribed by the doctor who I am not permitted to question because that would be questioning the government itself and is just not done here.

Contrast this with the last time I had the exact same disease when I was on PCS leave from the Army at home in Texas several years ago. I went to a private company called “The Neighborhood Doctor”. A PA saw me within five minutes of walking in the door. The version of the strep test that they used took all of fifteen minutes or so — which makes perfect sense because they have heated competition from the “Minor Emerency Clinic” across the street. The doc reviewed my case, concurred with the PA’s recommendation and prescribed me exactly one antibiotic and also listed alternatives that may be cheaper. Me, valuing a speedy recovery from my pain, opted for the initial name-brand recommendation (from Pfizer) and spent all of $8 on the pills and another $30 or so on the visit. This brought the expense of my medical recovery from a minor condition to a grand total of $38 and less than a half an hour of time wasted. Cake. And no insurance was involved at all.

(PAs, by the way, kick major ass at minor clinical care. This is an unglamorous but majorly overlooked skill these days and covers the vast majority of all medical provider requests in a place like the US.)

It is worth noting here that “clinics” generally are not used in Japan. Everyone goes to the hospital when their throat hurts. Why? Because you can. Who wants to go to a dinky clinic when you can go to the hospital to get your cracked pinky, torn nail or sore throat looked at? Of course this has the very real effect of causing people with no-shit emergencies (like folks with undiagnosed appendicidis) to wait in long lines behind the no-so-critical folks who certainly feel very important but actually are just being pussies (like the people with minor ear aches or strep throat).

It is also worth nothing that the Japanese government is dealing with permanently intractable issues related to public health care now. Talk on both sides is occurring in the media, but one common theme is so well understood that it is not even questioned in debate: there is simply no money to continue supporting the current healthcare system. In fact, very similar arguments were heard during the campaigns in France that got Sarkozy elected. These countries are wishing they did not have to deal with the realities of public health care, but the power structure based on public healthcare and the vote of the fearful elderly which is beginning to outweigh the vote of the gainfully employed younger generation who support such subsidy creates an unstoppable political force against real change. (That the demographic condition mentioned above is a universal situation common to all first world nations with subsidized health care systems is not a mere coincidence to me.)

To imagine that these anecdotes cover the life-threatening situations everyone is getting emotional about in the US at the moment is obviously wrong. However, the fact that I have seen a girl with acute appendicidis wait in line behind a kid with a minor wrist fracture tells you something about the way that a clinical outpatient hospital overload can impact the provision of care that really is needed.

After all, until a nurse, PA or doctor (in short, someone on the payroll) assesses a patient the hospitals and clinics have no choice about who to declare a priority or not other than simply cordoning lines off on the ground or labeling waiting rooms by priority. Inevitably everybody wants to be seen as soon as possible and naturally self-identifies as an emergency case. Which is why the “routine outpatient” waiting rooms at the hospitals near where I live are uniformly void of life and the “emergency care” waiting rooms are always overwhelmed by old people who spend every day there to get cold medicine.

[There is a joke about this in Japan that opens with two old people talking in the emergency waiting room of a hospital. One asks the other, “Hey, where is Taro? He’s usually here by 11:00.” The other responds, “Oh, he must be sick today, it looks like he stayed home in bed.” Note for the retarded: the funny part about the joke is that the sick guy didn’t go to the hospital because it was too much of a pain in the ass because he actually is ill…]

Most importantly though, and this deserves its own paragraph: In America life-threatening conditions, particularly of a traumatic nature, are already treated regardless of the insured or financial condition of the patient.

Post-trauma care, physical therapy and routine clinical outpatient care is what is not being taken care of by the current system. The folks clamoring for this big socialization of medicine are using ridiculous examples which do not apply such as saying “do you want the doc to check your wallet after a car crash before he decides to work on you?” Illegal immigrants found mangled near to death along the southwestern borderlands are given prompt medical treatment if found in time. The treatment occurs. It costs the city, county, state or sometimes just the hospital itself but they do it anyway. That is trauma.

Everything after lifesaving trauma, however, should be considered a service and the sole responsibility of the patient. If it becomes the public responsibility then you require a “need-based” argument for care.

But who determines the need? Am I entitled to everyone else footing the bill for my physical therapy after I’ve recovered from the injuries that would have killed me? And what level of recovery is considered to be “enough”? If I “need” to get healthier what is to say that I cannot also be said to “need” additional nutritional, massage, restructuring and continual athletic support from government sponsored health care providers? What is to say that I can’t simply say that I am in “dire need” of something more ephemeral, like emotional counseling for my wellbeing? Is this not a type of health care that everyone is responsible for providing me?

What if the verdict of my emotional counselor is that I “need” to lose weight to feel better about myself, but due to political drama it is currently fashionable to view fatasses as victims of some evil corporate system working hand-in-hand with an evil genetic conspiracy to doom me to fatness? Is is not the ultimate responsibility of the public to pay for my liposuction and plastic surgery charges also? What about fake tits for my women? I mean, I “need” those to feel good about myself too, and my need and my happiness are central to the purpose of healthcare after all, right?

It may sound that I am getting out of hand with my ever-expanding definitions of need and taking things to an extreme. But the fact is I am not. It is primary to the nature of public systems to always seek further expansions to their own definitions, thereby garnishing a larger piece of the public pie. I am scared of this and I do not support this. At all. Compelling me to provide for anyone but me is ridiculous in the first place. What if I simply refuse to?

I have worked in and out of government systems for a long time now and I know very well how they work. I have also lived in and used socialized and unsocialized healthcare and know very well how they feel both as a critical patient and (most commonly) as a non-critical out-patient. Healthcare is an incredibly scary thing to compel a country to accept precisely because it gives the government control over if and how long any given patient lives or is cared for.

But what?!? Wait! Isn’t that precisely what we were just accusing the insurance industry of doing a month ago?!? Given the contrast between the average intelligence of analysts in the insurance industry and government bureaucrats I absolutely am more confident in allowing an insurance company to determine my fate. After all, they stand to gain from my survival (I will survive to continue paying premiums) whereas the government stands to lose less the sooner I die.

This is actually the fundamental problem faced by governmentalization of a service industry: government process are exclusively destructive. Working inside the government a worker can look good for not spending money, not funding programs, not trying innovative things and it is a well-known fact of bureaucratic life that it is far better to been seen making no decisions than to make the wrong decisions in an effort to resolve issues. This sort of thinking can infect any large organization, but the key difference between a government and a corporation is that the corporation is, by definition, profit driven. It must keep cutsomers coming in, must successfully compete against rivals for customer dollars and maintain a revenue stream that is positive. A government, on the other hand, is publicly supported with tax money (a minus to the population), spends money on government directed programs (a minus to the national budget), and is not permitted to actually save money, but merely cut programs and not do things when funding it tight — essentially attempting to create positives by minusing minuses which does not work out as the whole system is based on a minus to begin with (the taxes). The whole system is negative, destructive and fundamentally structured against innovation and conflict resolution. The very root of the problem is the the nature of government expense to begin with.

Corporate structures, on the other hand, have a keen interest in cutting unnecessary expense (staying lean, which is to reduce drag from your positives), create new systems (positive), promote and explore new ideas (try new things and retain the positives identified), bring in revenue through services and sales (positive), and generate growth throughout the system. Nowhere in here do you see a destructive process other than to reduce the drag from the winning elements of the business.

Governments face no real pressure to reduce the size of their workforce, for example, but constant pressure to grant more office workers to satisfy the every-growing demand for internal “processing” requirements — which usually amount to nothing but oversight of the overseer’s receipt receiving and checking oversight processes (I wish I were making that up, but that is essentially what it usually boils down to…). Increasing the government work force is often mistakenly viewed as a positive because it “creates jobs” but this is a common falsehood. Those government jobs do not contribute to the national bottom line and feed on the taxes of the productive part of the population — and indeed require additional taxes to support their creation — ultimately a minus which produces nothing for the people.

Negative and destructive processes are the function of government. Positive and creative processes are the function of the private sector. This has historically always held true. It is the way society balances itself, in a sense. Foregoing that balance because we think we have somehow arrived at a more enlightened phase of history where private interests represent negatives and government could represent positives is to deprive yourself of a clear interpretation of human realities. “But that is sooo subjective!” the college sophomore cries out. History does not have any sympathy for your personal philosophical hangups. Plenty of people have dreamed away the unpleasant elements of their realities while their worlds fell apart — consider the case of the Chinese communists during the greatest famine the world has ever known, for example.

Through the public healthcare battel the public has been keenly focused on anti-drug company and anti-insurance company rhetoric. The idea that the drug companies are “just chasing money” and “manipulative” disturbs many people without those people giving thought to what that really means. This is a good thing. You want companies to be chasing money and be manipulative to that end.

I will restate that: The medical companies are chasing money and manipulating things. In order to make money they have to manipulate something, money doesn’t just fall into your lap from the sky after all. A drug company, for example, has two choices: manipulate the market structure itself (very difficult) or manipulate biochemical mechanisms (much easier). The latter behavior results in the development of life saving drugs and enhances the prospects of life for everyone, the former in an imbalanced market for pharmaceutical innovation. Under the existing system it is far cheaper for a drug company to try to out-smart its competitors in the field of research and production by hiring sharp people than to try to reshape the market itself. This is because reshaping the market requires a mass consolidation of the market. There is no one single giant insurance company, there are several. Any time a company starts to suck people can shift to other ones, that is how the free market works. There are a plethora of private hospitals, insurance companies, individuals, etc. all in the healthcare market and all of them must be marketed to because the market does not have a single-customer focus.

There is one overwhelming factor that influences the health industry today, however, and that is the government. The government is both the single largest healthcare customer (the military, federal aid programs, welfare recipient programs, community hospital subsidy, etc.) and also the most influential regulatory body (in the form of the FDA for the most part) in the same entity. Marketing to the government is very different from marketing to the private sector. It involves request and bid systems that very few small firms are familiar with or competent to utilize The process of matching needs with resources is largely obscure and not well understood even by most government contracting officials themselves (it seems to almost be intentionally contracdictory). The process of identifying needs, sourcing resources, deciding the details, etc. takes an enormous amount of time (which is an opportunity cost) and money.

To cut through a lot of that most large business interests hire Washington men and lobbyists because it’s just about the only way to get things done sometimes. Even though everything about it is not pleasant, there is a legitimate place in a free society for a political lobby. This is an entirely different sort of market than the private sector, but it is, in fact, a sort of market. It just happens to be one where outspending competitors in the lobby is what wins over outsmarting competitors in the world of real work. Put another way, in the market of political lobby it is more important to push money in the right directions than to push innovation and ideas at all (or even have them). It is the classic situation that spawned the phrase “It’s not what you know but who you know.” The key to American business has always been that the private market was overwhelmingly larger than the lobby market, and therefore people have always been free to challenge any existing structure based on their competence and performance, not based on who they know in government.

For certain special interest groups the political lobby is sometimes the only place they can be heard because they either represent a non-voting entity or because they are a vastly underrepresented demographic. For corporations, however, the private free market is the place to be heard and make an impact. With regard to health care, the political lobby market is a self-defeating arena where drug companies can quickly escalate the price of political competition to un-profitable extremes without producing favorable outcomes. The actual drug market is a place where a new invention that works correctly can undercut any and all gains in the political lobby by simply pushing a competitor’s product into obsolescence. In the free market no brinkmanship, political lobby expenses or assimilative care compromises must be considered. This model has the distinct advantage of giving the winning company the chance to shape its market for itself, whereas the political lobby requires a fundamentally self-constraining form of consensus to function which benefits nobody. This is why drug companies compete primarily in the field of research and marketing and very little against each other in the political lobby — at least in the free market (which until the other day meant almost exclusively in America).

Now consider that with socialized healthcare the subsidization of the market itself results in an effective consolidation of that market. In other words, since the only customer with any meaningful decision-making power is now the government itself any marketing efforts external to the political lobby need no be made. In fact, as noted above, research efforts also need not be made. Only one customer need be pitched: the ruling political structure. Rephrased, socialization of healthcare removes all normal market performance incentives and gives exclusive (and recursive) advantage to the drug company with the hardest-hitting political lobby.

You’ve complained about “special interest groups in Washington” for all this time, perversely using that as an argument against privatized healthcare, but in socializing healthcare you have given the pharmaceutical lobby its greatest lever of influence over the entire healthcare process by consolidating everyone who needs convincing into one small club of people: Congress.

This is a critical re-definition of the relationship between individuals and their government. And it is something that is, in all it’s possible forms, completely un-American. It is the greatest single American policy mistake I have ever witnessed. This is not to say that the American government has never made a mistake, but rather that it has always steered clear of mistakes which threaten to become unrecoverable. This particular policy blunder is of such magnitude that it is very unlikley that the US will ever fully recover from it. It is in the nature of people themselves to bleed the system dry when it comes to the subsidy of services which, essentially, can extend the life of a voter who can self-elect to continue living in a system which will further subsidize and extend the (now meaningless) life of the voter himself. I don’t have time to get into that, but the very nature of life, death and selfish human behaviour is very central to why governments never recover from public healthcare schemes — and also why public healthcare schemes sound like such great ideas to people who have never lived in a world where death is interpreted as a present but acceptable reality.

I sincerely hope that this decision is reversed. I absolutely will not ever take part in it because it represents the beginning of the end of the phenomenal and unprecedented good that the American healthcare industry has brought to mankind over the last hundred years.

To those who are so weak that they personally fear the day when they must die: I damn your shortsighted selfishness. You have to die someday. Just deal with it, don’t squander everyone’s chance at the future by settling for selfish cheapness in service at the expense of spawning a twisted social corruption to be dealt with by future generations (your grandchildren, namely).

To the politicians who know so well how wrong this decision was but felt trapped by their own rhetoric and feared the day when they would have to face the anger of a constituency which expected change, great things and free-shit from every direction but their own pockets: I damn your shortsighted selfishness. You must reverse this policy decision or, more practically speaking, prompt your eventual successors to repeal it. That will never happen, however, because by the time it is politically safe for you to guide your successors in that direction the subsidized healthcare bureaucracy will be so powerful that no political force will be able to destroy it without destroying himself. Let this be a lesson to all opposition politicians everywhere — next time you must create a populist red herring to kick and scream about from the depths of political impotence, invent a non-issue that will not favor the decline and demise of the entire political process.