Monday, November 25, 2013

Quote of the Day


"Under our system of justice the grand jury must have probable cause to believe all the elements of a criminal offense are present. It is simply not sufficient that a person’s behavior was reprehensible, disgusting, meanspirited or just plain stupid.”

Ohio Attorney General Mike DeWine, explaining the indictments handed down today in the Stuebenville Rape Case



Take The Wind


There was the inevitable media back-and-forth about over Bill Belichick's decision to give the ball to Peyton Manning in overtime in favor of having the wind at the Patriots' back, thus taking the risk that the greatest quarterback of his era (except when he plays the Patriots), would beat him before the quarterback with the all-time highest won lost percentage) ever had a chance to take the ball. The consensus among the gurus was that while events vindicated Belichick's choice, the outcome might well have gone the other way.

What the smart guys with the pens and the microphones are missing, I believe, is that at some level, Belichick doesn't care about the outcome. Now that might sound like a silly thing to say about one of the most successful coaches in NFL history. Of course, he wants to win, desperately. Winning is the only measure of success that matters to him. But in that pursuit, he understands with ruthless clarity the difference between what he can control and what he can't. He can't control injuries to individual players, so he refuses to invest extravagantly in any one of them, and concentrates on maintaining as even a quality as possible throughout the roster. Thus, in a season where he has lost his 2 best defenders, the Patriots defense is still performing at a relatively high level in the only category that counts. He can't control the officiating, so he has no interest in reacting to the egregious non call that went against the Patriots in last week's lost to Carolina. And he can't control the elements, so given the choice he had, he made the risk benefit calculation that Manning would fail to move the ball against the wind once more, as he had failed all night long.

Most critically, he doesn't care what you or I or the talking heads, or the fans or even his players think. He believes in himself.

What sort of training, you might wonder, help provide Belicheck with such such decision making skills? You'll be happy to recall that as a member of the Wesleyan class of 1975, he majored in economics...


It's Not The Rollout That Counts


It's the finish

New England 34 Denver 31

If only the Obama team could make adjustments the way the Patriots can.


Sunday, November 24, 2013

Denver 24, New England 0

New England looks so bad, it's as if they are channeling the roll-out of Obamacare.

Friday, November 22, 2013

Couldn't Happen to a Nicer Guy

Paul Krugman Collides With The Truth ( Edition)

By, Chris Rossini

As an update to a previous post, I'm proud to announce that Truth and Paul Krugman have crashed into one another. It's in regards to, but hey, when worlds collide, it's only right to recognize it.

So let's look at the timeline (my emphasis):

Oct. 1 - "The glitches will get fixed."

Oct. 14th - "Obviously they messed up the programming big time, which is kind of a shock. But this will get fixed..."

Nov. 6 - "If the bugs in get fixed..."
AND NOW .... Drumroll please!
Nov. 20 - "But the future of the reform depends not on policy per se but on whether the IT issues can be fixed well enough soon enough, a subject on which I have zero expertise."
There we go...Krugman has no clue. He had no business saying that anything would work. It took almost 2 months, but he got there.

Now that we have out of the way, let's build on this admission of ignorance. Let's move on to Economics....

Wednesday, November 20, 2013

If the ACA will raise healthcare costs


How come we are seeing the opposite since its passage?


If the ACA Fails


If the ACA, which surely is in a heap of trouble right now, ultimately fails, it will not be because it limits choices (it does so for very few), or increases costs (that question is yet to be decided), or because it's too complicated. It will fail because it redistributes wealth from those who have it to those who don't. From Thomas Edsall's outstanding (and depressing, for your faithful correspondent) analysis in today's Times

This is what Roosevelt understood so well. If the government is going to provide a benefit, it had better provide it for everyone. Otherwise the knives and pitchforks will come out.


Et Tu AHA?


This week the American Heart Association and American College of Cardiology issued new guidelines for determination of just who should be taking cholesterol lowering drugs commonly referred to "statins." The guidelines abandon a value based approached that begins with a patient's level of "bad" cholesterol, and rely soley upon online risk calculator's estimate of having a heart attack or stroke within the next 10 years. If the risk is >7.5%, treatment with statins is recommended. Mercifully, and perhaps sensing that something was not quite right form the beginning, the National Heart Lung and Blood Institute, the nation's cardiovascular disease research arm, declined to participate in the effort.

The new approach has been subject to immediate, scholarly and in this cardiologist's opinion, highly valid criticism that it substantially overestimates risk, and therefore, subjects millions of people to unnecessary drug therapy. As Dr Steven Nissen points out, the new approach virtually insures that every African American man above the age of 65  will be subject to treatment. In response to these alternative views, the poobahs have met in Dallas at this weeks AHA annual meeting. Ernest conversation no doubt has taken place. The result, predictably, is that he new guidelines will go forward as written. Too many reputations on the line no doubt.

So yet another American institution, this one deeply honored, diminished itself.


Tuesday, November 19, 2013

Prices and the Affordable Care Act.

The biggest problem with the Affordable Care Act, and Medicare and any single payer system is consumers are shielded from price. When prices are too low, people over-consume. The Obama administration realizes this. From the Washington Post on

The problem there was politics, not code. In the first version of, there was no way to window shop. You needed to register an account in order to see the plans. The rationale was sensible enough: The White House wanted to ensure people saw the real price they'd be paying. That meant verifying their identity, their income, their age, their citizenship, and everything else that goes into calculating subsidies.
This proved a technological nightmare. Imagine if before browsing a book in Barnes & Noble you had to find a clerk and have them take down and verify your credit card, your phone number, and the address you want the book sent to once you've bought it. The staff would quickly be overloaded. No one would ever get into the store. And it would be a massive waste of time because many of the people clogging the line were just there to browse anyway.
 When the Post says the White House wanted people to see the real price they would be paying, it is saying the White House didn't want people to see the real cost of their health insurance. It didn't want old and sick to see how much it really costs to insure them, because they may choose not to buy. Where they less concerned the young and healthy people wouldn't notice they were being forced to overpay to subsidize the old and sick, or did they succumb to their own hype and believe somehow exchanges would result in lower prices for the young and healthy as well? Or was it a numbers game: many more getting subsidies, than paying for over-priced insurance and the politicians were willing to make that trade-off?

It is ironic the ACA is in deep trouble due to it's willful desire to shield consumers from price and that desire resulted in a technological, are we still calling it Glitch?

The idea consumers should be shielded from price is the biggest objection many, including myself, have had to this legislation from the very beginning. The ACA relied on insurance as a financing mechanism for health care, the original sin, removing the consumer from seeing the price of his consumption, and doubled down by removing the consumer from seeing the price of his insurance. It took a bad system, and made it worse.

Single payer won't make it better. It will make it even worse. "Free" healthcare will result in more over consumption. The only way the government will be able to ration healthcare is by bureaucratic mechanisms which includes deciding what treatments people can and can not have and when they can have it. It will be health care for the loudest. Scream you need your neighbor to pay for your birth control and birth control becomes free. Scream you need your neighbor to pay for your ED and ED becomes free. This has already happened with Medicare and ACA, there's no reason to think this trend would moderate with single payer.


Monday, November 11, 2013

NY Times: You WILL lose your Plan. You WILL pay more. You WILL stop complaining about it.

The NY Times editorial page this morning laid out some of the basic tenets of the Affordable Care Act: People will lose their plans, and they will pay more. An adjacent oped has an interesting view on those who complain about this.

Up to seven million people may be able to get health policies without paying any premium at all. Some four million people may have to pay more for new (and better) policies, not all of whom will necessarily be upset at getting better coverage at a competitive rate.
(At least) 4 million will not be able to keep their plan and "may have to pay more." This is just the individual market. The employer based market is much bigger and the disruptions to the employer market will be much larger as well. For instance, my small employer will be switching plans to avoid the Cadillac tax. The Cadillac Tax is a tax on high-price, high-benefit plans. The reason our old plan was a Cadillac plan is because we are a small company operating in NY. We have high premiums, but certainly not extravagant, not even generous, benefits. But such is the "logic" of the law that I must change to a plan with FEWER benefits for the purpose of..... If anyone can tell me I'd love to hear the answer.  The Affordable Care Act's response to their assertion American's pay too much for health care is to incentivice me from buying health care. Ok, but why? What if I want to buy health care? What's wrong with that? I like Apple products. An increasing portion of my budget over the years has gone to Apple products. But that's not a national crisis. I digress.

What was equally interesting to me was an op-ed by Lori Gottlieb remarking on the unsympathetic responses her friends had to her complaint about losing her plan and having to pay more for it.

“Obamacare or Kafkacare?” I posted on Facebook as soon as I hung up with Anthem. I vented about the call and wrote that the president should be protecting the middle class, not making our lives substantially harder. For extra sympathy, I may have thrown in the fact that I’m a single mom. (O.K., I did.)
 She wanted sympathy and instead was told to suck it up.

I understand the whole point of the law is to do this. The point of the law is to make some pay more and get less so others can pay less and get more. This whole Rube Goldberg contraption has that guiding principle. I do get that. But what the supporters of the law are finding out is that people get kind of cheesed when the foundational promises made when passing this law: keep your plan, keep your doctor, lower premiums, fewer uninsured, were deliberate deceptions, at worst, or made from ignorance of the law's consequences, at best.


Oh, and those heartless, evil, racist, stupid, insane, extreme neanderthals have been pointing out the law's promises were untrue for years. But tell me. If someone is a heartless, evil, racist, stupid, insane, extreme neanderthal for pointing out the truth, what is the person who has been deliberately deceiving or the person who didn't understand the untruths being promised?

Job Growth! Compliance is a Growth Industry

Daughter Knabe interviewed for a job in a compliance department. I encouraged her to drop this line on her prospective employers, "Compliance is a growth industry." What do you mean she asked?

This, from

A growing thicket of federal regulations under the Obama administration has contributed to an employment spike in at least one corner of the job market: the increasingly vital compliance industry.

ObamaCare, the Dodd-Frank Act and other large federal undertakings have led to an outpouring of new agency rules derided by business groups and defended by advocates.

But the regulations have also been a boon for professional compliance officers paid to help companies understand and adapt to the new requirements. 

“Staff to track compliance issues is on the rise, and it has been for the last several years,” said Richard Riese, senior vice president for regulatory compliance at the American Bankers Association. “And, at the moment, there’s no prospect it will decrease anytime soon.”

Data kept by the Bureau of Labor Statistics (BLS) shows an 18-percent increase in the number of compliance officers in the United States between 2009 and 2012, according to an analysis conducted by the conservative American Action Forum (AAF).

Of course,  laws and regulations aren't necessarily bad. And of course many laws and regulations are necessary. But as we ask ourselves why is it that job growth remains anemic (except during periods when the government shuts down) maybe the answer can at least partly be found in increased regulatory burdens. 


Friday, November 8, 2013

The Affordable Care Act and Marriage

Turns out the Affordable Care Act has a fairly substantial incentive to avoid marriage. From The Atlantic

Any married couple that earns more than 400 percent of the federal poverty level—that is $62,040—for a family of two earns too much for subsidies under Obamacare. "If you're over 400 percent of poverty, you're never eligible for premium" support, explains Gary Claxton, director of the Health Care Marketplace Project at the Kaiser Family Foundation.

But if that same couple lived together unmarried, they could earn up to $45,960 each—$91,920 total—and still be eligible for subsidies through the exchanges in New York state, where insurance is comparatively expensive and the state exchange was set up in such a way as to not provide lower rates for younger people.
Personally, I don't care if people marry, who they marry, how many they marry, how often they marry, what species they marry. Personally, I don't think the government should care either.

I'm guessing this marriage penalty was not contemplated by the authors of the ACA. Designing "a system" sounds so alluring to those in power, and pretty much impossible to do in practice. We are seeing that proven (again) with the ACA.

Let's add this incentive to the long list of perverse incentives (employer incentive to reduce work hours, employer incentive to keep business from hiring, employee incentive to not work, consumer incentive to cost shift to Medicaid, insurance incentive to drop plans and of course insurance incentive to undo the risk pools so painstakingly created by the ACA). It is an edifice doomed to collapse. We've known this from the beginning.


Thursday, November 7, 2013

Losing your Plan is a Feature, not a bug, of the Affordable Care Act

Supporters of the Affordable Care Act (ACA) respond to the "You can keep your plan" broken pledge by saying 1) those were junk plans that are being lost and 2) it only applies to small segment of the individual health care market. Both claims are wrong.

It is curious supporters would make a blanket claim about the quality of plans being dropped, a claim without subtlety and nuance, when it is exactly that lack of specificity that has put the broken pledge of "read my lips you can keep your plan" in such focus. The idea that ALL plans impacting 26 million people are junk is absurd on its face and there is no evidence presented ALL, or the majority, or even some, of those plans are junk.

The claim that losing your plan only applies to a small segment of the population is more troubling. There is plenty of evidence from HHS and CBO that many in the employer-based market will lose there plan. For instance, here is the CBO in May of 2013 estimating 7 million will lose employer based coverage by 2018 and 5 million total in the non-group market by 2017. That's a  lot of junk plans.

Casey Mulligan thinks the estimates are too low. He thinks the number can be 20+ million, driven by the incentives written into the law. Employers have an incentive to drop coverage and employees will have an incentive to allow their coverage to be dropped. He concludes:

Moreover, this is not an issue of the adequacy of the group coverage that's lost, it simply that the ACA induces market participants to tolerate coverage loses in order to, at taxpayer expense, reduce the monetary loses they experience as a consequence of the law.

Losing your health insurance is a feature of the ACA. The ACA was designed to kick people off their plans. This is not a surprise to many who have opposed this plan from the start.


Monday, November 4, 2013

Did Diane Feinstein Really Say "You can keep you plan" only applied until ACA was passed?

The answer Senator Feinstein gave to Bob Schieffer's question, on Sunday's Face the Nation,  about keeping your plan was that it applied only until the ACA was passed. Let's give her the benefit of the doubt that she was really answering some other question. But what question was she answering?

More and more people are discovering that losing your health plan is a FEATURE of the ACA, not a bug.

SCHIEFFER: The president said in the beginning that one thing was that if you like the health care program you had you could keep it. We now know there was debate within the administration before he said that as to whether that was actually a promise that could be kept. Should the president not have made that statement?
FEINSTEIN: Well, as I understand it you can keep it up to the time -- and I hope this is correct, but this is what I've been told -- up to the time the bill was enacted, then after that it's a different story. I think that part of it, if true, was never made clear. It is really very unclear right now exactly what the situation is. And, yes, that's a problem. But I think it has to be said, this is a very large major priority. And if it can get up and running, it can be, I think, a very positive thing. The big problem here is there are so many destroyers -- in the House, in the public, in the private health care sector that just want to destroy. That's not helpful.


Friday, November 1, 2013

When Are the Democrats Going to Suggest a Health Plan of Their Own?

1- Dems are upset Republicans didn't support the Affordable Care Act even though the ACA was a Republican idea, thought up by the Heritage Foundation and implemented in Massachusetts by Mitt Romney. Got it? The Affordable Care Act is a Republican idea.
2-Dems are upset the Republicans won't suggest a replacement for the Affordable Care Act. Got it? The Republicans have no ideas for health care.

But if #1 is true, number #2 is false, since the ACA IS a Republican idea.

So the real question is, When are the Democrats going to suggest a health plan of their own? And if the answer is Medicare for All, the question is, Why didn't they pass that in 2008 instead of passing the opposition party's plan?


Don't Spit on My Boots and Tell Me It's Rain. ObamaCare Edition

From CBS News:

(CBS News) WASHINGTON - For 31 days now, the Obama administration has been telling us that Americans by the millions are visiting the new health insurance website, despite all its problems. 

But no one in the administration has been willing to tell us how many policies have been purchased, and this may be the reason: CBS News has learned enrollments got off to an incredibly slow start.
Early enrollment figures are contained in notes from twice-a-day "war room" meetings convened within the Centers for Medicare and Medicaid Services after the website failed on Oct. 1. They were turned over in response to a document request from the House Oversight Committee.
 The number that signed up the first day? 6. As in 1, 2, 3, 4, 5, 6. Not six hundred, or six thousand. VI.

Now I know it's the tendency of most humans to hide bad news, and put the shiniest happiest face on things.

But as they say in Texas, Don't spit on my boots and tell me it's rain.