We need a public option with a French accent

I’ve been thinking a lot lately about the inefficiencies in the US health insurance system, as compared with what seems to be the amazingly efficient French system. Most talk is centered on inequity here, which is the bottom line, of course. Still, we like to believe that the economy (and all progress in this country) is driven by efficiency, innovation, and productivity, so the contrast in this case seems rather alarming.

Listen here to author T.R. Reid on his experiences in doctor’s offices around the globe, seeking help for a “bum shoulder”. Listen, particularly, to his account of the French system of files and payment processing.

[In France and other ‘Bismarck model” European countries] These are private docs, private hospitals, and mainly private insurance plans…

This business in America where we have the in-network deal or we have to get pre-authorization; any doctor, any clinic, anybody in the entire country, you chose ‘em, you go, and insurance has to pay the bill within two weeks or so…

[French doctor’s offices] are Spartan... What’s missing [...] is the files and files of patient records, and there’s no billing office… the patient comes in, out of her pocket she pulls […] the Card Vitale, he puts it in a reader on his desk and her entire medical record shows up on the screen. He chats with her about her problem, he’s typing down what she’s got wrong, and he says “I’m going to prescribe a course of antibiotic” […] and he’s typing all that up. He’s finished with her, […] he hits one key on his computer and the entire bill has gone to her insurance company, he’s going to be paid in three days, and she’s gonna get her copay back from the insurance company within two weeks. Done. No paperwork.

Compare that to the situation now facing my sister, trying to get her daughter needed treatment for a deforming case of scoliosis. The condition is not, of itself, life threatening, but further deformation could begin to impact internal organs, including her lungs. The girl has, since birth, been very susceptible to lung ailments.

The treatment is thoracic spinal fusion, a 7-8 hour surgery that, while not uncommon, is far from routine. My sister’s search up and down California for a doctor competent to perform the surgery who would also accept Medicaid led to UCLA, where the surgery is performed, apparently, hundreds of times per year.

My sister lives in Northern California, so the team at UCLA worked with her doctor up north to coordinate some of the pre-op work and insurance submittals. There were two necessary pre-op trips to LA. The surgery was scheduled for today, September 15. The family flew down this weekend, mom, dad, the patient, and her twin sister. Dad and sis planned to go home Friday, while the patient would not be clear to travel for three weeks, so she and mom would stay down here.

What do you say to a kid about to go under the knife? I told her it would all be over in two days, and she wouldn’t have to think about it anymore.

So I was sickened yesterday when I heard that the surgery had been postponed for at least three weeks, because her Medicaid paperwork had been lost in some shuffle or another and UCLA won’t do the surgery until it is pre-authorized. In the meanwhile, her parents must find money to change tickets and buy new ones, putting more financial stress on an already stressed family.

“Medicaid is a government program!” I can already hear the screeches. But this situation isn’t unique to public insurance. It’s due to an approval system in use by public and private insurers, and it’s stupid, and it’s wrong, and it wastes time and money.

There is (or there was a couple of weeks ago) language in the current house bill that would enable electronic funds transfers between doctors and Medicare/Medicaid, and presumably other public insurers. That’s a good step.

Now how about language that removes pre-approval from the transaction? The doctor treats, the doctor gets paid. If there is reasonable suspicion of fraud after the fact, it becomes a criminal investigation. If the fraud were committed against a public plan, the charges would be federal, and the penalties would be stiff, and would include prison time.

I’d like it if we followed the Swiss model, and made for-profit basic health insurance illegal. If we can’t do that yet, we should build a strong new public option, while strengthening Medicare and Medicaid. These programs should have zero pre-authorization requirements, and be dedicated to innovating payment and record keeping systems.

If the private sector won’t do it, the government must. And if the private sector wants to remain competitive, it’ll have to go along.

(Here's the NYT story on Reid's book.)

My New Year's wish: surprise me

Over a month of no blogging! I think the reason is simple: nothing shocking has happened, and I am waiting for the new era to begin.

Sure, things have happened that are worthy of comment, but my capacity for shock and outrage and snark are seriously depleted.

I mean, really: is it surprising in the least that a candidate for the GOP chairmanship would send out an offensive "parody" disk to republicans around the country this season? We really don't need any more ammunition in the You Pasty Old White Boys Don't Get It And You Never Will argument, and yet, they just keep delivering. Also not shocking: the possibility that this stupid, stupid move will actually enhance his chances for the seat.

Oh but never fear, rank-and-file, your intellectual leadership has a plan! And it includes Twitter! Because Twitter and Republican are two proper nouns I'd like to see forever linked.

Bush, meanwhile, pardons a man whose father's campaign donations might effectively kill congressional republicans Eric Holder/ Marc Rich outrage machine. So then he decides to take the pardon away, within days of issuing it. Was anyone honestly taken aback by this? Has the Bush administration ever properly vetted anyone?

Congressional republicans are demanding "transparency" and there's talk of them shutting down the president-elect's stimulus/recovery plans if they don't pass GOP muster. They want "fiscal responsibility" again. Of course they do. Whatever.

Also, turns out that OSHA hasn't actually been in the business of occupational safety and health for about... 7 years. Question for the 10% of American workers who're injured on the job each year: does it surprise you that your government's chief concern has been not bugging your employer? Thought not.

Then there's the coal ash spill in Tennessee: turns out that no matter how "clean" your coal operation is, the ash still contains toxic levels of arsenic, lead, barium, chromium, and manganese; tens of thousand of pounds per year. Also turns out that the TVA asserted for days after the spill that the sludge was not toxic. Shocking, shocking shocking. Not.

And the situation in Gaza is terrifying, Bush is in Crawford riding his bike, and Condi isn't on a plane yet. Although, even if she got herself over to Riyadh or something, I don't know how much leverage she has left. And all it leaves me with is a sad sense of deja vu. It's been a long time.

So I'm waiting for a new year, and some new stories to open. A whole new cast f characters who maybe won't be so goddamn predictable and obvious and stupid.

(I had an hour or so of dismay over the Rick Warren thing, but ultimately I realize that the man I voted for reaches out in just this way, compromises in just this way, recognizing that the people who admire Warren and didn't vote for Obama and supported prop 8 need a president, too. Note to Barack, though: it'd be swell if you invited Rev. William Sinkford to the White House before his term is up this summer. Just sayin'.)

I'm waiting patiently for New Years Eve champagne, and then I'll be waiting in a cozy wash of ahhhhhh for January 20, 2009. After which I am certain there'll be lots to get worked up about, and hopefully a few surprises.

Now that's egotiscal posturing we can believe in, my friends

Yesterday morning, principles for the Wall Street bail out seemed to have been agreed upon, by both parties and the White House.

Early yesterday afternoon, Superman John McCain flew mightily snuck onto Capitol Hill, before proceeding to a White House meeting that he had requested.

Late yesterday afternoon, everyone was fighting, Paulson was on one knee before Pelosi. Boehner, who earlier in the week was demanding the congress pass a "clean" bill (GOP shorthand for give Paulson what he wants) was circulating a secret new plan to Blue Dog Dems and rank and file Republicans.

McCain was mostly quiet on the events of the day, humbly saying that America could determine for itself what his role had been.

Ok, so I've determined that McCain has devolved into a small, angry, sneaky, obstructionist fuck.

It's not that I love the bailout plan- even the tidbits of improvement over the original that've been trickling out. It's that you know damn well that Boehner and Shelby should've been pushing their ideas all week, at the bargaining table. If they were good-faith actors, that's what they'd have done.

Instead, they blew up the talks because of what Frank correctly assessed as "a rescue plan for John McCain".

I don't trust these motherfuckers to offer anything helpful- they're talking about insurance instead of cash, but all they're going to want to do is suspend capital gains tax and ensure that consumers get nothing out of the deal, let's be honest- I have no idea if resolution has to happen today to stave off world-wide depression, or if the immediate threat is greatly overblown, or if doing nothing is an option.

I do know that this bomb was a political stunt, that it's bullshit, and that John McCain set it off because his polling numbers are- rightly- diving.

I don't know what will happen today, but I really hope this explodes in fucking Boehner's face. And McCain's.

The bailout, even with strings, is not enough

So they keep telling us that we have to invest in junk debt to the tune of a few hundred billion or maybe a trillion dollars, because the whole financial system is on the verge of collapse. President Bush explained to us yesterday that the infusion of public wealth into private enterprise is necessary to keep lines of credit open for business, otherwise many of them will cease to exist, and for citizens, who otherwise will not be able to get loans for homes, cars, college.

Everyone and their brother has screamed for oversight, and it looks like that will be part of the package (though having the mechanism does not mean oversight will occur- look at Iraq for a sobering example). Equity stake? Maybe, though that's still opposed by the administration. Limits on executive compensation may be the big "win", if anything in this can be properly called a win.

My laundry list of adds includes things that will, apparently, not gain ground: The ability of bankruptcy judges to reset loan terms, moratorium on Wall Street lobbying, these things will be tossed. Most importantly, I am not hearing anything about investment in the much mourned Main Street.

I think it's important to remember something about the Great Depression: in addition to a needed regulatory regime and insurance structures, the Depression was addressed with substantial investment in the country's Main Street. Infrastructure projects and even humanities projects put people to work, creating wealth at the bottom, which in turn created the need and means for businesses to grow.

The idea that Main Street will recover this time with simply the ability to take on more debt is, I think, deplorable.

Another thing: while the New Deal helped stop the bleeding and enabled the slow healing of wounds, the wealth of the country really only picked up after we entered WWII and commenced massive war spending.

This time around, I think we'd all like to avoid a world war, so we should probably figure out what our government's investing priorities should be outside of the Pentagon and Wall Street.

Apparently, Wall Street does have a suitcase bomb

Because what else could drag John McCain back to the Senate at breakneck speed (after a Couric interview and a stump speech, that is), when we know because President Bush has told us repeatedly that really, really important work can be done from almost anywhere?

I'm looking forward to Obama showing up for the debate, and telling the assembled press, "I don't know, I've been on the phone with Republican Senator Coburn and Harry Reid and Speaker Pelosi and Hank Paulson, and they tell me they have it under control, so I really don't know what John's doing."

Maybe Wall Street has a suitcase bomb

Via TPM:

Cheney Heads to Hill to Quell Republicans

By Kate Klonick - September 23, 2008, 12:58PM

The White House dispatched Vice President Dick Cheney to Capitol Hill Tuesday morning to help shore up support for the financial bailout of Wall Street.

Wonder what Cheney will tell them this time?

Economists For Obama

I keep forgetting how much I love Economists For Obama.

You wanna know who either candidate's economic advisors are? Check here. You wanna know how their numbers really play out? Check here. You wanna know what your taxes would look like under Obama's plan?

Check Here.

Good signs- but don't let up yet

Looks as if Paulson's ready to play, and the Democrats are pushing. Via Calculated Risk, WSJ is reporting that the administration will accept executive compensation limits, and Bloomberg says they're ready to ok an equity stake.

Light 'em up

I've sent emails to my rep, Speaker Pelosi, and my two senators. I will spend some time calling congress, too, as soon as I finish this post.

Don't think for a minute that staff isn't tallying calls and emails from taxpayers, and calculating the political consequences of their next move. Start here to find your rep's contact info.

I am so deeply angered by this situation. Talking the other night about what this means about our government, some of the terms tossed around and weighed were Communism, Fascism, Oligarchy, Hegemony.

Maybe it's because I've been reading Reformation history, but I keep coming back to Feudalism. You know, the princes (Wall Street) deplete the royal stores with their building cathedrals or fighting wars or whatever, and the Monarchy digs the country out of a hole by raising taxes on the serfs (you and me).

And yes, Senator McCain and my Republican friends, you better damn well believe that I want taxes raised on the Masters of the Universe that got us into this disaster. If I have to pay for their malfeasance, I want their responsibility to be substantially larger.

Some bright chatter from various corners this morning:
Brad at SN! shares his congressional talking points.
Matt Stoller has been communicating with members, and hopefully they fight as hard as they email. This one is my favorite:

I also find myself drawn to provisions that would serve no useful purpose except to insult the industry, like requiring the CEOs, CFOs and the chair of the board of any entity that sells mortgage related securities to the Treasury Department to certify that they have completed an approved course in credit counseling. That is now required of consumers filing bankruptcy to make sure they feel properly humiliated for being head over heels in debt, although most lost control of their finances because of a serious illness in the family. That would just be petty and childish, and completely in character for me.

Krugman calls shenanigans.
Josh Marshall has questions about Phil Gramm's once and future role in all of this.
Robert Reich has a pretty good list of conditions.

Get on the phone.

The New Market emerging- guest post

I'll be back to posting just as soon as I can get my outrage formed into coherent sentences and without a Sweeney Todd reference. Until then, I give you the very reasonable Mack.

The largest financial bailout in United States history, which some traders are starting to call the ‘Securitized Housing Investment Trust’ (hint: think acronym), is causing an existential crisis amongst those who hold to purest free market ideology. Senator Jim Bunning, Republican of Kentucky, echoed this sentiment when he said, “The free market for all intents and purposes is dead in America.” These ideologues doth protest too much, methinks.

Since the 1929 crash, the last time the nation faced an economic train-wreck of this magnitude, the U.S. Government has effectively been in the insurance business and it has generally served us well. The vast majority of laws and regulations are designed to mitigate risk. Drunk driving laws minimize the number of car wrecks, and the short-tick rule (until recently eliminated) prevented unfettered short-selling from forcing solvent companies into insolvency.

Government institutions enforce these policies. What is the purpose of the military but an insurance policy against attack from other nations? What is the key purpose of a central bank other than insurance against a run on banks?

In fact, the present-day capital market system, which has been responsible for raising living standards to the highest in world history, relies upon laws and regulations: the Securities Act of 1933, the Securities Exchange Act of 1934, the Commodity Exchange Act of 1936, and the Investment Advisers Act of 1940. Although not perfect (and definitely requiring an overhaul), these laws have served Wall Street and LaSalle Street very well over time.

The problem with fundamentalist free market ideology is that it is only theoretical, and ultimately not pragmatic. Truth is, without government establishing the premise of private property enforced through law and justice, contract markets would soon devolve and be quickly replaced by gangster capitalism akin to Putin’s Russia. There is a term for the unfettered combination of concentrated power, ideological adherence and capitalistic greed, it is called “fascism.”

There is another term “beta,” which defines the systematic return/risk of assets. This concept is related to Modern Portfolio Theory and underlies the oft-stated investment strategy of buy-and-hold. What is not well-understood, even by many sophisticated investors, is that this theory is flawed. The issue is portfolio construction. Accordingly, the definition of “true beta” or “true market portfolio” must be extended to encompass other economic factors.

What academics came to recognize was that approximately one-third of non-governmental tangible assets in the U.S. are owned by the corporate sector, and only one-third of these corporate assets are financed by equity. As a result, Jagannathan and Wang concluded that assumptions underlying the concept of beta must be altered in order to resolve anomalies in the model. In other words, “true beta” or the “true market portfolio” must include the “aggregate wealth portfolio of all agents in the economy.” This is a revolutionary view with both political and economic ramifications.

Business balance sheets do not in practice reflect public infrastructure assets which businesses are dependent on. For example, a trucking company’s greatest asset is not its fleet of trucks, but the U.S. Highway system. Likewise, public liabilities such as the cost of pollution are also not reflected on balance sheets. This is beginning to change with the idea of integrating regulations into “cap-and-trade” contract markets involving emission allowances.

It is time for a new economic ideology to take hold which adheres to a progressive view. Government and free enterprise are actually joint partners in promoting economic growth and well-being. Certainly, political will effects a constant tug-of-war between interests, but this is not unlike the struggle between a sales-trading desk which drive revenues for an investment bank, and internal compliance managers who ensure balance between risk and reward.

The problem with the prevalent populist stream of conversation regarding free markets versus socialism is that such dialogue is anachronistic. Rather, the conversation needs to shift to good versus bad governance, and public policy which enhances the value of the aggregate wealth portfolio of all agents in the economy.

Mack Frankfurter

Mack and I have done a lot of arguing about the state of the capitalist system. His "new beta" gives me faith, because it comes not from a liberal suburbanite like me, nor a liberal economist. It comes from a guy who loves capitalism, loves the markets, and makes his living there.

Thanks, Mack.