Miscellaneous

Obviously, I dropped the ball on this blog. I anticipate preparing
five or six more "Thoughtful Thursdays" over the next year. And sending out
more of these miscellaneous postings.
I have been focusing my
writing energies this semester on the complete Requirements Document for the
Constitutional Construction Kit
The next Thoughtful Thursday is from that effort.

Hack for Egypt

The Hack For Egypt , as part of Cloud Camp 2011, has proposed
a "crowdsourcing" project for the new Egyptian Constitution.
They are looking in the future at a crowdsourcing for the Bill of Rights in
that Constitution.
This is a much less ambitious proposal than the one I am working on. one needs
a simulation component where the Egyptians.
The Egyptian unemployment
is concentrated among the young, as it is in
many other countries including the Arab world.
And 50 percent of educated of
men
and ninety percent of young female
college graduates are unemployed.
So there is a resource of time to work on the Constitution.

Climate Change

I talked about using sortition-based consumption taxes to address
climate change. The Wall Street Journal
had a special issue on Energy and the first article, which frankly
is an editorial, on Climate Change. They say that emissions cuts,
raising energy costs with taxes, cuts economic
activity. Countries do not want
to do this. By putting the tax at the consumption side, this attacks
imports, and tends to get people to consume in ways
that are not energy-intensive.
They may not buy a computer-they may use an internet cafe.
Imports get taxed based on the embodied energy.
They may buy a smaller and more energy efficient house, use public transportation instead of a car.
The article suggest that governments should push for innovations that produce
less costly energy.
Wall Street Journal, November 29th 2010, Page R1

United States Health Insurance Mandate

As I assume all readers of this blog know, the United States has
mandated that all people purchase health insurance. However, there
is some question whether that is constitutional. The famous "necessary
and proper" clause of the United States Constitution gives the
United States Congress the power to make laws "necessary and proper" to
exercising its enumerated powers.
Does mandating that everyone buy health insurance fall within the
"necessary and proper" clause? One District Court has said no!
And it appears that a Florida judge will rule the same way.
However two lower courts said yes, they did.
I made a proposal that would resolve this. Make individuals tax rate
dependent upon their financial responsibility. We already have deductions
for contributing to IRA and for some education items. Individuals who are
purchasing disability insurance, health insurance, education should pay
lower taxes than those who are not.
There are people who cannot be expected
to have money for
health insurance, the single mom putting
herself through Nursing School. However, those who have money
for a flat panel TV or internet, should spend or invest
it some other way such as health insurance.
The New England Journal of Medicine article,
"Can Congress Make you Buy Broccoli? and Why
That's a Hard Question" by Wendy K. Mariner J.D. M.P.H.,
George J. Annas, J.D. M. P. H. and Leonard H. Glantz J.D.
said that Congress had two goals in passing the health reform
it did:

1. 
   provide a way for all Americans to gain health care
2. 
   preserve the private, commercial health industry

Obviously, it is not reasonable to require the health insurance companies to insure anyone regardless of sick they are and let people wait until they are in the proverbial ambulance to buy health insurance.
When a person wants insurance and has a "preexisting condition," we need to distinguish between those who simply waited until they got sick and those that had good reasons for not purchasing health insurance. A bureaucracy cannot. A sortition jury can.
Judge Vinson asked "If the government decides that everyone needs to eat broccoli, can Congress require everyone to buy Brocolli." If Congress chose to expand Medicare or Medicaid to cover everyone, they could have. Congress could then raise everyone's taxes to do so.
I believe at tax time, everyone should compete to show how responsible they are, buying and eating their broccolli, and saving, whether for retirement or their health needs.

Bronte Capital Management Blog

I met Mr. Hammond on the plane to New York City, and then by luck as I walking near 42nd Street in Manhattan. The first article I turned to, was the one on the Australian financial system. There is concern about one of the strategic funds in Australia. More importantly, he discusses the risks with privatized social security of fraud.
There are many other articles there, often very insightfully showing the numbers in investments and securities, from Chinese bus adverts and alcohol sales to Australian Real Estate near the iron ore mining boon.

Benefits Schemes

A gentleman who won two million dollars from the lottery is still collecting food stamps. The food stamp program uses income and lottery winnings is not considered income. State of Michigan is talking about getting a special waiver from the Federal government. (Ron French, Detroit News)
This is why all benefit recipients should go before a sortition jury to eliminate those who don't deserve them, even though they may qualify under the rules.

State Income Taxes

Wall Street Journal, Volume CCLVII Number 70, Page C1 and C2, March 26th to 27th, "The Price of Taxing the Rich" Robert Frank
Million dollar a year incomes pay 45 percent of California's Income Tax receipts. Similarly percentages for Connecticut and New Jersey. The problem with this is that these individuals incomes are erratic. Of course, when the market is up, these people "take their profits." And they have to pay their taxes on the capital gains, and tax revenue goes up. (We saw that when the federal government was briefly in surplus around the turn of this century. But some of this was due to "hundreds of millions in unanticipated tax revenues from taxes on capital gains.") In one year, the top one percent of the taxpayer's income dropped sixteen percent. In 2006, California anticipated a six billion change, either direction, from year to year on a regular basis. In the dot com bust, revenue from capital gains changed from seventeen billion to five billion.
Of course, states can protect themselves with "rainy day" funds. But state governments, like people in general, do not have the discipline to do this.
This blog has long called for salaries and other expenses to be a share of their revenue. Thus States would make goverment salaries and pensions a percentage of revenue. (Note that under the full share economy, government workers and retirees would set their mortgage, rent, etc. as a percentage of this amount. Thus, if this varied fifteen percent a year, they would not be between this decrease and an expense that does not change. Their discretionary income for day-to-day purchases would go up or down by the same percentage as the state's revenues.) And their "borrowing" would be the same way. Thus, rather than selling a three percent bond due in thirty years, they would sell a perpetual bond that paid out nnn percent of the revenue. I earlier called for a "clawback" tax to deal with, among other things, those earning high pensions.
A consumption-based sortition "badness tax" could have firms competing to avoid the taxes necessary to fund the state government.
And with individuals having a share of the income of the companies in which
they invest, there would be less variability of income. Individuals
earn money as the company does, not by selling the shares.

Australia Incentive Program to improve Diabetics care

One of the problems with incentivizing anything is that the description of what one has to do to earn an incentive will not accurately match the mental image of what should be incentivized. Australia will have a new program for improving Diabetes care, where they give money to the doctors when the patients avoid the complications from diabetes (32% of the health care costs there).

Not only is the article excellent, the link excellent, the comments are very well informaed.

Patient Copyas and Encouraging Efficiency.

Patients who have to pay more for the doctor do visit the doctor less! They also end up in the hospital more.

So much for using patient copays to reduce patient costs.

See our four-part participatory democracy framework to reform health care. The last part is the doctors are paid on the basis of the service they provide, after they provide it.

Cloture, Bargaining and Bribing Senators

The Peoria Journal Star, December 24th , 2009, Volume 154, Number 29, Page A4 had a great editorial summarizing the places where Senators were given special treatment for their state in exchange for their vote to pass the Health Reform Bill--to get the sixty votes needed for cloture. Extra aid has gone to Connecticut, Louisiana, Montana, North Dakota, South Dakota, Florida, Vermont, Massachussetts, Nebraska. They quotted Harry Reid, Majority Leader, 'I don't know if there is a senantor that deosn't have something in this bill that was important to them. And if they don't have somethin in it--(it) doesn't speak well of them."

Of course, one could argue for more statesmanlike senators. Of course, one could argue against the rule that allows fillibusters to continue until sixty percent vote yes--or you could take my proposal, postulated here in May that fourty per cent of either house is sufficent to put a version of the bill before the American people. Should there be several versions available, the American People would vote by Approval voting.

Fosamax Bone Density Machines, A Case Study on how not to incentivize the drug companies

NPR had an excellent presentation on how Merck increased the sales of its Fosamax pill which increased bone density and reduced bone fractures from osteoporosis. Bone density diagnosis machines were expensive and there were thus few of them. It worked with and eventually threated the manufacturerers into reducing the cost so that most Doctor's offices had one. The result was that many women were diagnosed with osteopenia, a milder form of loss of bone. However, although fosamax increased bone edesnisty, one study showed that it did not decrease the risk of fracture, and, in fact, there are anecdotal reports that it might even make the bones more brittle increasing fracture risk. A Rome medical meeting looked at different bone density numbers and arbitarily divsiions between the numbers where a women would be diagnosed with osteoporosis, osteopenia and normal bone density. (My mother and myself also found fosamax could cause problems with dental disorders.)

A pharmacoepidemiologist said that often drug manufacturers would take a drug effective in severe cases of a disease, and market it for those with midler forms. It was not clear that the drug was helpful in these situations and whether the risk of side effects, etc. outweighted any benefit it might provide for those with milder forms.

The problem is that we need to reward drug manufacturers for beneficial results for patients after a long term, and not reward drug companies every time a doctor prescribes the drug, that is for sales.

I spoke about this a little in the fouth part of my four-part participatory plan for health care reform.

Health Care Cost Control

Health Care Reform has now become Health Insurance Reform, putting "the squeeze on insurance companies." But it does nothing about lowering health care costs and the incentives on physicians and others to do more and more procedures, and to salami slice the health care activity and bill to make more money.

Our participatory democracy plan is to make the insurance companies and other large payers spend a certain amount of money. The health care providers would provide the best care they possibly can, and on the basis of same, after the fact, the participatory democracy juries in collaboration with experts and computer software provided by the insurance companies decide how to allocate the fixed pot. For group plans, the sortition juries are selected from the premium payers, the group covered. For those plans subsidized or completely paid for government, the sortition juries are chosen from the general population.

In other words, fix the costs, but leave the autonomy to the doctors on how to practice!

Health Care Poll

The Associated Press polled Americans on health care. Eighty-two percent are in favor of a ban on insurance companies discriminating against those in poor health. However, when told that this ban would cause most to pay more for health insurance, 31 per cent of Americans are now against it and only 43 percent support it.

The questions should have been Would you support a ban on insurance companies not insuring those with pre-existing conditions who had an opportunity to buy health insurance, could afford same, but chose not to do so?

Would you support an insurance company not insuring someone with a pre-existing condition who lost their insurance through no fault of their own (e. g. got laid off)?

A bureaucracy might not be able to distinguish between the two but a sortition jury could have. It is also the premise of my alternative to a public insurance plan, a sortition plan. That is, there is no public "insurance" but there is a public "pool" of money to which both the person covered and the public (as part of general taxes) would pay for. When an individual got sick, they would petition for approval to have the public pool pay for this. A sortition jury would look at both the illness and treatment involved. It would also look at how much the person contributed to the public pool and their income in comparison to the contributions made. Thus, the eighty dollars that the proverbial washer-women contributed might have more weight than the eight hundred dollars that the YUPPIE contributed.

Sixty-seven percent agreed that everyone should have "at least some health insurance" with only 27 percent opposition. However, sixty-four percent are opposed to a tax penalty for not having insurance. And even half of Democrats oppose fines to enforce the requirement to get insurance.

I proposed a broader requirement of financial responsibility and this, obviously ambiguous one, be interpreted by sortition juries.

Health Care

This American Life had a special on Health Care . This illustrates many of the problems in our current health care system. The first is the cost and stress of the billing process.

They featured a Four-physician office has four people in the billing department. There are 20 to 25% on billing department and bad code that don't go through. And part of the problem is that the coding system is inconsistent. There is a code for for a spacecraft accident but no code for someone coming in with a complaint of "weak arms." 200,000 medical coders in United States and BLS expects that this will rise.

I have recomemnded that sortition juries look directly at the medical records to determine what doctors, and hospitals should be payed.

How do we pay the pharmaceutical industry? Obviously, we want to pay those who manufacture the drugs and those who develop new drugs. The latter should be proportional to the benefit of new drug over previously-discovered drug. But the system we have doesn't work well. Each pharmaceutical company encourages doctors and patients to demand their new drugs even if the difference is marginal. Meanwhile, the insurance companies charge copayments so that the patient would demand the cheaper generic drug. Example is a drug which can be taken once a day instead of twice a day whcih costs much more expensive. (That is, a time release version of the drug is four hundred dollars a month more. The show emphasized an acne patient with "pimples.") There is also a question of whether insurance companies increase expenditures on health care and making individuals responsible for their own health care reduces expenditure. If it is coming out of your pocket, presumably, one will spend more carefully, than if it is coming out of the health insurance industries pocket. They talked about the veterinary medicine industry where pet insurance is just developing. They featured a couple who spent a lot of both their money and a lot of their veterinary insurance companie's money on Harriet, a hedgehog. So how do we make a payment system where the patient helps control costs without scrimping on things that would truly make them more healthy and perhaps save money in the long run? They had economists who talked about how insurance is driving up costs by separating the consumer from the payment for the services they provide. Yet, Paul Krugman can state, "Serious students of health care have known for a long time that the magic of the marketplace doesn't work in health care..." As a side note, his blog led me tot he article that Massachusetts REsidents support their new health reform by 59 percent to 28 percent. But there is a concern about cost.

I propose that sortition juries allocate the 9.6 per cent, now higher, of the health care budget that is spent on pharmaceuticals. Each pharamaceutical company would get ap ayemnt based upon the improvement they made in the health compared to their competitors. This would encourage them to spend money on research and not on marketing.

The next issue is the war and race to consolidation among both insurance companies and hospitals. Aetna dropped eight million patients/policy holders. (Bill Potters talked about this first on Bill Moyers show and also to a U. S. Senate Committee.) Aetna dropped out of the markets where it was not the top insurer, so it could not negotiate good contracts with the providers. Fragmented insurers are not be able to negotiate the prices. Their health care economics expert compared insurer market share with the hospitals considilated. Thus, there is a race to of monopolists vs. monopsonists.

He advocated the system in Maryland, where there is a standard price for each procedure, regardless of the size of the insurance company or if the person is uninsured. (But what do we do about individuals whose diagnosis, symptoms or treatment just doesn't fit any of the predefined categories. This is replacing the coding problem for insurance companies with a coding problem for the bureaucracy that sets these rates.) I should add in fairness that John Hopkins Hospital, in Baltimore, Maryland, has been number one in the US News and World Report top hospitals ranking since 1991.

And we can bring the group back to group insurance. The group would have a pool of money from premiums. There would be groups that would handle catostrophic cases, cancer, transplants and unfortunate accidents and other groups tht would handle the routine stuff ( a simple broke n leg or a appendectomy). The latter group would make referrals to the other hand. They would bargain with the hospitals, or as I pointed out earlier, pay after the fact so the individuals can deal just with their doctor about the health care. What was the insurance company would be paid for their expertise in organizing information, not for apparently heartless acts like dropping out of markets?

Although not relevant to participatory demoracy, I enjoyed their historical presentation. At 1900, some doctors were still using leaches. There were no hospitals as we know them. They were for the ill. Recall that President McKinley recovered from his wound at the home of the president of the Pan American exposition, where he was to die. (Source, wikipedia, and Complete Life of William McKinley and Story of his Assassination by Marshall EVerett.) Then, the average person spent five dollars a year on health care, $100 a year in today's money. 1909 was the first drug that cured an illness. Salvorsen cured syphillis.

Hospitals started curing things and not a poorhouse for the sick house. In the 1920's Baylor Hospital had unfilled beds due to the price, but people spent more money on cosmetics that on the health care, but the president remarked that a person would have to save up twenty years to cover a hospital bill. So they started the first insurance, $6.00 a year for up would pay for up to twenty-one days. They sold this policy to teachers in Texas. Blue Cross came out of this and started marketing to employers. By World War II, only nine percent of Americans were insured.

In 1943, an unknown bureaucrat at the IRS, made a routine ruling, employers don't have to pay taxes on the health insurance premiums for their workers. This was included in 1954 Tax Code unambiguously.

A Participatory Democracy Framework for HealthCare

Part One, Referendum by Approval voting

We all vote on the major health care restructuring/reform ideas that have been discussed. Any proposal that can get 40% of the votes of either house should be submitted as a possibility. (The Republicans won't feel left out.) Also, President Obama should get one that is solely his idea. And lastly, we should set up major industry groups and groups. Each of these submit a proposal as well.

We vote by approval voting. That is, the citizens can vote for more than one proposal that they like; The one which gets the most votes wins.

Part Two: Parameterize the Structure.

For example, tax rates, penalties for not choosing a planet, reimbursement rates, the percentage of money going to rural providers, different specialties, teaching hospitals are all parameters.

Each year the population gets to vote on each of the number. The final number is the median of whatever everyone selects. To prevent wild gyrations and to allow health care firms to plan, there will be plus or minus five percent cap.

Part Three: Introduce Sortion for allocating funds.

Each of the categories get a fixed amount of money and providers are batched. That is, we have bathces of rural-based orthapaedists, batches of oncologists in teaching hospitals, batches of primary care physicians in low-income areas, etc.

Each provider submits statistics on what they did, who they treated, who they chose not to treat and outcome measures. Of course, the patients submit satisfaction numbers. Patients who have a particularly bad outcome can bring their complaint to the sortition manager. This replaces the current malpractice system. But in addition, patients who particularly think the doctor did a good job (saved their live when noone else could), can raise this as well.

Part Four Extension to Private Health Insurance FundsAll of our private health/HTMO bueauracracy is based on one of two models

1. Fee for Service
2. Capitation (Fixed fee for keeping this person well)

The problem with the first is that it provides an incentive for care that isn't needed. Studies have demonstrated when a physician could reasonably make a decision either way about a test, they will order the test.

The problem for the second is the incentive to ration and limit care.

People don't like either because the insurer or HMO bureaucracy gets in the way of the physician/patient relationship. Insurer requires precertification. HMO's require approval to refer to a specialist.

The fixed model with sortition distribution is the third way. The Insurance company says that it will spend x dollars. It tells doctors to provide health care that they feel are needed. The insurer rewards the providers that help the most people, do the least harm with the most dollars. This is based upon ingo and outcome (how sick or injured were the patient; how were they treated, what were their outcomes.)

The sortition juries can help decide, along with the aid of biostatisticians and physicians, how to distribute the funds. The insurance companies provide the structure for the system and provides the medical and statistical experts. They get a percentage of the amount distributed, and do not get rewarded in any way for rationing care. The sortion jurie can also pay a bonus to the experts evaluating the care as well as patients who bring their evaluations. Instead of having paid expert witnesses and lawyers in the malpractice settings, the juries determine who provide the best information.

Autonomy to the physicians in providing the health care; autonomy to the payer (us) in paying for the health care!