78 Comments

1. ray_g:

I have read, many times and in different places, that, compared to a drama or a sitcom, a news program is relatively cheap to produce, and therefore profitable, even if ratings are low. I don’t know if this is true, but seems plausible.

I’m sure you or some of your regular readers have enough experience with the business to confirm or debunk this widespread notion.

Apr 23, 2007 - 8:29 am 2. Roger:

You are correct, ray_g, that dramas and sitcoms can be expensive, hence the rise of the “reality show,” which is arguably cheaper than news (not sure here).

Apr 23, 2007 - 8:45 am 3. markus:

I’ve just gotten cable for the first time in years, and I’m actually surprised at how shallow and repetitive all of the broadcast news, both network and cable, seems to be. The Virginia Tech shooting massacre, for instance, is just bludgeoned to death, the same old stories and themes, over and over and over again. I thought competition was supposed to lead to better quality and more innovation? Not with the news anyway. I think the availability of visual imagery makes the reporters lazy.

Apr 23, 2007 - 8:53 am 4. Buddy Larsen:

Jeez, markus –you’ve been watching the broadcast nets all this time? No wonder your politics are so…ummmm…partially-informed.

Apr 23, 2007 - 9:06 am 5. Buddy Larsen:

…just kidding, markus. Here’s a quote from the link:

“From the moment she walked in here, she held herself above everybody else,” says a CBS staffer. “We had to live up to her standards. . . . CBS has never dealt in this realm of celebrity before.”

That brings to mind that the whole concept of combining a “celebrity” (someone famous for being famous) and “news” (serious information on the state of the world) is seriously patronizing on the face of it. Once the giggling starts in the peanut gallery, it’s probably all over.

Apr 23, 2007 - 9:25 am 6. Steven Mitchell:

ray_g,

I’m no expert, but from what I have read on the subject, television news is cheap if all you do is hire a talking head to read gussied up AP feeds, for whatever “stories” for which you can rustle up some video. You might have to pay your talking head a lot, but the rest of it is cheap compared to other things you could slow.

On the other hand, if you actually investigate and gather news, and go after stories based on their importance in the world, it can get rather expensive. Supposedly, in its hey day, CBS made a fairly decent profit off of news even though they tried to do it right. (I’m not saying they succeeded, but they spent the money trying.) That was with no competition from cable, and a dominant position compared to ABC and NBC. Note that even with a market that big, ABC and NBC had to resort to sleight of hand.

An honest, cheap way to do what they do now would be to simply quit trying on the news part: “Hey, television is for video and we don’t have much time to convey words that you can read about faster in print. Here are some images of things happening around the world. For context, here are a list of books and websites where you can read more about it.”

Apr 23, 2007 - 10:56 am 7. Steven Mitchell:

markus,

TV is inherently shallow. With careful choices in subject matter, a lot of hard work, and constant vigilance–dedicate people can occasionally overcome this limitation. That doesn’t change the nature of the beast.

Apr 23, 2007 - 10:58 am 8. markus:

Buddy — I only watched TV at other peoples houses. Yes, thats why i’m so ‘misinformed’, I didn’t see a single Swift Boat ad in ‘04.

Your quote about Katie Couric, of course, indicates that Dan Rather, despite his sky-high income, is in all likelihood a down-to-earth guy, a throwback to an earlier time when tv reporters were not treated as royalty, and made only 50 times the average American wage rather than 5,000 times or whatever it is today. That was always my impression of him, although I generally watched Jennings when I had the chance.

Apr 23, 2007 - 11:06 am 9. Captain Hate:

TV is a horrible medium for discussing serious issues. Years ago I saw Leon Botstein, president of Bard College, speaking on Nightline in sound bytes on education in which he sounded, and looked, like the world’s biggest pinhead. Subsequently I had an opportunity to hear him in person and he came across as brilliant, imo. Bard is a nutty enough place (they have an Alger Hiss chair) but Botstein’s heart is in the right place, and his head is definitely in the right place regarding education, and why schools are doing such a godawful crummy job.

Apr 23, 2007 - 11:08 am 10. Buddy Larsen:

markus, I thought competition was supposed to lead to better quality and more innovation?

Usually, and in most things. but there’ll always be the exploitative, the tacky, the tabloid play toward the sensational. There’ll be more or less of this always at the margins, it’s that ole First Amendment.

What can we do about it? Give PBS a monopoly on the airwaves? THAT’d make for a well-informed public, wouldn’t it. Or maybe we just need some more regulations added into the FCC licensing regulations. Some sort of “global test” (in JFKerry’s immortal words).

Anyway, looks like France is joining Germany, Poland, most of eastern Europe, Britain, Japan, most of Asia, Canada, Mexico, Australia, and Brazil among the countries electing governments that that don’t see USA as “a sort of international pariah” –so i guess the messy old non-MSM media, attenuated in reach though it is, is actually getting some facts and data out into the world.

Apr 23, 2007 - 11:14 am 11. ricpic:

Given all the options available why would anyone go on eating Silvercup bread? Kraft cheese-food? Gulden’s mustard and Heinz ketchup as their only condiments? Millions do.
It’s easy to forget there’s a whole world of unsophisticates out there who haven’t gone away.

Apr 23, 2007 - 12:59 pm 12. Terrye:

Not everyone gets cable, especially older people who have been watching the evening news for years.

And it is shallow. For instance, I can remember back in 99 when the UN did a report and said that they concluded that Saddam had WMD stockpiles and programs. This was on the news. ABC did a report on Saddam’s ties with AlQaida.

And now a few years later these same news outlet act as if none of that ever happened, those reports were never filed. etc.

It is as if they report in a black hole. Whatever they say gets sucked into some vortex and we are just stuck in this news loop. There is no past or future, there is just the spin of the moment.

I have gotten to the place where I have to force myself to watch any TV news.

Apr 23, 2007 - 1:39 pm 13. jedrury:

Katie flies to Virginia Tech the day of the shooting, this is her story, her big break, she is a UVA graduate and she is boss. Prime time, she, the news queen, questions the president of the university, a nice pleasant man at the end of his wits, repeatedly calling him, “President Seeger.”

“How do you feel, President Seeger?”

His name is Steger.

Competence !!!

Apr 23, 2007 - 2:16 pm 14. markus:

Buddy — I might support Sarkozy in the runoff if I were a Frenchman. Unlike the American right, he has no plans to phase-out the nation’s social insurance system. Rather, he wants to ensure the level of economic growth necessary to enable the nation to SUPPORT the current system as much as possible.

Lula, whom you referenced, is also one of my political heroes of the present era. Your basic smart pragmatic populist.

I have no solutions for the vapidity of commercial television news. More money for PBS would of course be a good idea. Anything with the remote possibility of making Mike Judge’s Oscar-deserving Idiocracy less prophetic than it is should be cheered, and funded with your tax money. God I miss Dick Nixon, a Republican who knew how to fund big government.

http://www.imdb.com/title/tt0387808/

Apr 23, 2007 - 2:18 pm 15. Buddy Larsen:

Me, too, how I miss that good old Wage & Price controls “we’re all Keynesians now” Nixonomics.

Apr 23, 2007 - 2:46 pm 16. Buddy Larsen:

Unlike the American right, he has no plans to phase-out the nation’s social insurance system

Close –what you meant is, “…phase out negative returns on private property forced at the point of a gun into a 1930s authoritarian socialist ponzi scheme.”

Apr 23, 2007 - 2:54 pm 17. Barrett:

Markus,

The more you say, the more my opinion of you deteriorates.

“Unlike the American right, he has no plans to phase-out the nation’s social insurance system.” Huh?

There are relatively few who espouse this view. However, most people here realize that government is almost always the worst channel to provide services. It becomes monopolistic, which means you get an inferior product at a high price. You have either never had a government job or you have one and couldn’t make it in the private sector. Move to France.

Take a look around the world at your esteemed statist societies and economies. You find less freedom, less opportunity and lower standards of living. But you will get your pension check and wait for months for medical care! It’s a great deal for the unmotivated. Remember the phrase in the USSR – “We pretend to work and the government pretends to pay us.”

I, for one, think that reforming government and allowing the private sector to deliver as much as possible would be invigorating for the economy and provide people more opportunity. There are ways to provide a social safety net and promote individual retirement savings without it flowing through government. Think a bit. Hey, Social Security on a cash basis becomes insolvent in 10 to 15 years. My guess is we will see some changes forced upon us one way or another.

Regarding the news, Roger is right. The evening news is worthless. You can scan the headlines on Yahoo or Google and get more. The evening news is a public service for the lazy and brain dead.

Katie can’t even get they VT President’s name write. I wonder how she does with the facts.

Apr 23, 2007 - 4:41 pm 18. jrdroll:

“I am actually stunned that anybody still watches the evening network news at all. Why? ”

I like “Special Report” with Brit Hume on Fox. Why? it is sort of fair and balanced.

Apr 23, 2007 - 5:31 pm 19. Buddy Larsen:

Add to Barrett’s post that the concept of “responsibility” –which the statists use in every frame of reference, needs questioning. Re soc sec alone, shouldn’t we we ask which is more “responsible” of (1) forcing citizens to invest in a guaranteed negative return on capital (that is, below the inflation rate), or (2) allowing them to invest in private industry, where there has never yet been a period of time equal to a working life where the markets have not generated orders of magnitude more return on capital for the retiree to enjoy?

Add to Barrett’s post that the government cannot create this growth because it has no market discipline (wherein production requires the cost of production), which means all metrics of efficiency will drift to the lowest common denominator, that is, to be only good enough to damp a taxpayer revolt.

Add to Barrett’s post the dampening effect on the human spirit of womb-to-tomb mandated subservience to an authoritarian system.

Apr 23, 2007 - 5:55 pm 20. photoncourier.blogspot.com:

Tom Wolfe suggested that the TV anchorperson is the modern equivalent of the Linotype machine:

“The anchor’s voice converts material written by others into a form that is easily consumable by the audience–that’s what the linotype machine did.”

Apr 23, 2007 - 6:47 pm 21. doc99:

If Ms. Perky leaves, fear not, CBS viewers. The I-man is available!

Apr 23, 2007 - 7:12 pm 22. Buddy Larsen:

I’d watch Sharpton!

Apr 23, 2007 - 7:49 pm 23. Terrye:

markus:

No one is doing anything of the kind. In fact Bush does some flak for coming up with a drug plan for seniors. The truth is that these systems need to be reformed to survive and so far the Democrats have not had the political courage to face that fact.

Apr 24, 2007 - 3:51 am 24. Steven Mitchell:

Terrye nails it in that last post. Money doesn’t magically appear out of the government’s behind. (Yes, I know who prints it.)

Apr 24, 2007 - 7:34 am 25. markus:

Barrett –

I doubt you ever had a positive opinion of anything I’ve said here.

By Social Insurance I mean Social Security and Medicare, i.e. programs that benefit society as a whole, not just the indigent. And Bush IS trying to phase-out both of these programs, to change them from defined benefit to defined contribution programs that would suject sick and elderly people at the most vulnerable time of their lives to the whims of markets. Under his SS proposal, for instance, the guaranteed level of income would be much smaller than the already small amount that it is today. And the additional amount of money a person would receive would be based on how smart they were as investors, and how their investments were doing at time they cashed them in. If they were smart AND lucky, they would make out about as well as they do now. If they weren’t, they would do worse. In other words, the program would offer a variety of individual benefits, rather than social benefits. And the level of income a person could count on would certainly not be secure, as it is now. Thus, “phase-out”.

By the way, one way these programs benefit the middle- and upper- classes, is by allowing their employers’ to provide a greater level of SUPPLEMENTAL coverage than they otherwise would if they had to also be responsible for the BASIC level of retirement medical and pension coverage that SS and Medicare provide.

My mother recently died from cancer. Unfortunately, we caught it too late to have surgery, or the medical bill would have been even higher. Still, her bills were considerable. And except for a few small items, it was all paid for by Medicare, and by her retirement health benefits. She received excellent but expensive care, paid for by taxpayers like you, just as she paid for other sick people during her teaching career. I’d like to thank everyone reading this for their donation to the good cause. She belonged to no risk groups, and it could just as easily have happened to any of you. I’ll be honored to do the same for each for you, hopefully no time soon, when your market-worshiping butts are on their death beds. (I guess this is my Al Gore moment, as in when he talked about his sister’s death. In my case, my mom was an ardent Democrat who wouldn’t have minded at all.)

Apr 24, 2007 - 8:13 am 26. Steven Mitchell:

“…And Bush IS trying to phase-out both of these programs, to change them from defined benefit to defined contribution programs that would suject sick and elderly people at the most vulnerable time of their lives to the whims of markets…”

Not that I agree with the rest of it, either, but this is so blatantly wrong I had to call it out. All plans to privatize social security have included safety nets, including the gradual moving of funds out of stocks into bonds and even fixed income funds as the person approaches retirement age. This is why all such plans would have to be phased in over the course of a generation. Everyone that is around 50+ today would have to be paid out of the current structure, and people in the 40-50 range need options.

The idea has always been that people invest in the private plan early, because over 20 years (preferably from around age 25 to 45), the market will vastly outperform social security’s return. Then you have to think about locking in some of the returns. This has always been true of any 20 year period that the market has existed, including any 20 year period that overlaps the great depression.

Apr 24, 2007 - 8:23 am 27. Buddy Larsen:

Markus, you’re demagoguing the issue.

The reform plan includes many details which for all practical purposes eliminate the risks you trumpet (including that professional fixed-income specialists will run the voluntary retirement funds–Granny won’t have to study-up to compete with Ivan Boesky).

And what about the realized risk of no-return, higher taxes, and/or theft by inflated currency?

Everyone will be happy that your mom rec/ good care. But what about the cost? Are you saying she could not have had equal care at a lower cost under a rationalized system?

And what about the future?

How is the Dem approach (which included that standing ovation from themselves at the previous SOTU speech, over Bush’s lament that his plan had been rejected) in ANY way “responsible”?

Apr 24, 2007 - 8:49 am 28. Buddy Larsen:

The connection between our love for our mothers and idiotic economics needs to be revisited, with alacrity.

Apr 24, 2007 - 8:58 am 29. markus:

Steven –

Where is your money going to come from? I thought the Trust Fund was going bankrupt in a decade. Now you want to move that date forward, diverting funds from the Trust Fund while promising to pay all current benefits to people over 50, and give people 40 to 50 “options”? (And wasn’t everybody supposed to have such “options” under Bush’s proposal?)

Apr 24, 2007 - 9:03 am 30. Buddy Larsen:

Try to unhook the economics from the politics, markus, long enough to apply some general accounting procedures such as “double-entry bookkeeping”.

Apr 24, 2007 - 9:16 am 31. markus:

Buddy,

If someone wants to show me a market-driven health care system that works, and not just on paper, I’d be glad to see it. (Talking about vision care, elective plastic surgery, veterinary care, and other optional health services doesn’t count.)

Nobody has the expertise to effectively comparison shop for health care, especially when diagnosed with a life-threatening disease, which is one reason there is no such thing as a rational health care MARKET. On the other hand, with better planning and a single funding system, we could easily have a cheaper and more rational health care SYSTEM. If there were no emergency room visits from kids with strep throat, for instance, this would allow those hospitals to charge insurance companies less for their inpatient services.

Apr 24, 2007 - 9:21 am 32. Steven Mitchell:

“Where is your money going to come from? ”

If I had my way, out of a virtual freeze in spending now, while it could still matter. But polticial realities being what they are, it would probably involve less fun sources of funding (read probably ill-advised tax increases). The longer we wait, the worse the choices get. *However*, I’ll ask you the same question. Since keeping it the way it is now will costs much more than the private plan, where do *you* plan to get the money to keep it the way it is now?

Bottom line: The country made a promise to current older people using a Ponzi scheme. I agree that we have to substantially keep that promise. The question is not to find an easy way out. There ain’t no such animal. The question is are we going to make the same stupid, Ponzi promise to the current younger people?

As for everyone having options, yes, older people can opt in if they want. The older they are, the less likely they should. (It’s more complicated than that, since you have to consider expected lifetime for that person, how long they plan to work, etc.) I’m 40. Some people my age should opt out as much as possible. I’d be better served by opting in as much as possible, if they did it today. Below a certain age, however, the options change. You don’t get to stick with the Ponzi scheme. But as Buddy said, there are some choices about how one opts in. After all, a 20 year old with no real obligations except to get started as different needs than a 35 year old with a family.

As for medicine, I give my same answer as before: I’m for limited, government payment for preventive care and certain other relatively low cost but highly efficient procedures. Beyond that, I’m for government setting up laws and organizations that make it easier for people to group together to get decent insurance. Given those two, I’d even agree to substantial tax credits for lower-income people to use to buy that insurance. However, if the cost of medicine is to be handled, it has to be on the supply end, not the demand end. There are too few doctors and nurses and too many lawyers. This situations is a defacto monopoly situation supported by the medical schools, AMA, government, and the legal profession. It has done more damage to this country than the so called AT&T monopoly ever did.

Apr 24, 2007 - 9:28 am 33. markus:

Video debate between Jonathan Chait and Megan McArdle on French vs. American health care system:

http://bloggingheads.tv/video.php?id=229&cid=1199

Apr 24, 2007 - 9:29 am 34. Steven Mitchell:

“If there were no emergency room visits from kids with strep throat, for instance, this would allow those hospitals to charge insurance companies less for their inpatient services. ”

We already have a partial solution for this. I don’t know what it’s called elsewhere, but around my neck of the woods it goes by the name of “Urgent Care Facility”. These are about half the cost of emergency rooms, sometimes even less. I’ve become even more familiar with them over the last couple of months, since my wife got here broken arm treated in one.

The idea has been around a long time. It’s a market reaction to a perceived need. It took so long to appear because of government red tape. With a single-payer system, you get more red tape–as the long lines in Canada and UK, with worse care, are prime examples of.

Apr 24, 2007 - 9:32 am 35. Buddy Larsen:

markus, people DO “have the expertise” to shop primary-care doctors. The problem is not with markets, it’s with the legacy of third-party payer. No wonder people abuse the system–it’s a freebie (search “problem of the commons”).

Apr 24, 2007 - 9:45 am 36. markus:

Steven — The “easy way out” is also the right way out. Modify the current system, preserving its fundamental features. Slowly raise the retirement age as we have done previously. Raise the cap on income subject to the payroll tax (substantially) and the rate itself (slightly and slowly). Encourage legal immigration, particularly of skilled workers. Cut wasteful spending (food subsidies and various weapons programs come to mind, but I’m sure you have a few reasonable suggestions too).

?Urgent care facilities? sound like a good idea, the kind of facilities that we would have had a lot earlier under a health system with more central planning. The ones I checked out online require health insurance or payment upon receipt of services. I?m curious how much they charge patients who have neither health insurance nor a working credit card.

Jonathan Chait , BTW, thinks that France should be our model for health care, not Canada or England. Got that, monsieur? I?m sure Sarkozy will promise to preserve it should he be elected, something that I’ve never heard an American politician promise in regard to our health care system.

Apr 24, 2007 - 9:52 am 37. Sandy P:

markus wants a single payer system — which doesn’t work, just look at Canada, England, Scotland, Ozland, Kiwiland — but the free market has to prove it to him.

You don’t shop for HC when you get a life-threatening illness, you shop before. Isn’t that what insurance is for?

Apr 24, 2007 - 9:53 am 38. Sandy P:

OTOH, it really doesn’t matter to me in the end, I intend to have enough money to fly to India or another country where I can get service promptly instead of waiting in line like the Canucks do for knee replacements.

Oh, wait, they come to the US for those……

Apr 24, 2007 - 9:56 am 39. markus:

Sandy — insurance is wonderful, if you have a plan with generous benefits. More and more people don’t. And corporate

As I said, Canada and England is not being held up as a model by universal coverage advocates. Clearly, neither model will go anywhere in this country. As corporate America comes around to the idea of mandating universal coverage, a President Clinton or Obama or Romney or Giuliani or McCain will get together with the various governors and corporate heads to hammer out a hybrid plan, one that will please but also somewhat disappoint socialists like me, while driving freemarketers into an apoplectic frenzy.

Apr 24, 2007 - 10:17 am 40. markus:

Last sentence of first paragraph should have read: And corporate America is finding it harder and harder to deal with health care inflation while remaining internationally competitive.

Apr 24, 2007 - 10:19 am 41. Steven Mitchell:

Stupid type key ate my longer answer. Short version:

If that’s your easy way out, I’d hate to see the hard one. The parts that aren’t mere stop gaps are ultimately arranging the deck chairs. (Not quite that bad, since some things are useful in their own right.) You don’t fix a Ponzi scheme by delaying the reckoning. That makes it worse.

Urgent Care is a textbook example of something that was fought with red tape at every step of the way. I saw it from the inside. I wrote some of the Medicaid reports that were used to analyze the costs, pick pilots, and then report on their success. I saw the changes in administration that derailed pilots for political reasons (and sometimes personal gain). Richard Scrushy was nothing but a piker, in comparison.

If we let old people die off from neglect as fast as France does, we could save tons of money in health care. It’s like the way the average black working male gets scammed by Social Security, only applies to most of the country.

Corporate America could best be helped by taking them out of the loop entirely. See my earlier answer where I talked about government making it easier for people to form groups to purchase health care. The dirtly little secret of this particular aspect is the same with all highly regulated fields in the USA. The really big corporations don’t want this truly fixed. The current situation gives them a competive advantage in the domestic market.

Apr 24, 2007 - 10:28 am 42. Buddy Larsen:

How many of the uninsured are young people rationally retaining the insurance premiums because they’re unlikely to use but minimum medical care?

And people like me, self-employed small-biz? I quit buying insurance eons ago, as a young family man back in the mid 70s. Raised four kids (youngest is in High scool, others all thru college & now careering), always paying out-of-pocket for med care.

I’ve kept that saved money in the markets, and over the years have roughly octupled it. We’re all in extremely good health, have wanted for nothing in medical care, and have all those premiums in stocks that over the years have asset-appreciated around 8%/yr, in addition to paying out average 4%/yr dividends into family cash-flow.

It’s helped me help them to finance their educations, small-biz start-ups, and will help me to leave them something when I cork off. Soon or later, now that I’m gray-bearding, I’ll probably buy some catastrophic insurance, to protect against the worst of old age.

Meantime, the increase in wealth from so-called ’self-insuring’ is real, and has already paid strong benefits that can never be taken away.

Sorry for the personal anecdote, but, you told your mom’s story to argue a position, so I told this one.

Apr 24, 2007 - 10:44 am 43. Buddy Larsen:

The real objection to reforming entitlements is that it would set off such an economic boom in this country, that the Dems would start running out of property-less poor people.

“Hands Off Entitlements” would be more honestly said “Hands Off My Poor People”.

Apr 24, 2007 - 10:53 am 44. Buddy Larsen:

Far better to talk down growth, and magnify fear, in order to tax the liberty-creating economy sufficiently to slow the exodus off the plantation.

Apr 24, 2007 - 11:09 am 45. Sandy P:

Via Dissecting Leftism:

Over-Taxed Canadians: “Taxes are eating into Canadians’ incomes more than ever, costing the average family more than food, clothing and housing combined, suggests a new survey. …The average Canadian family earned $63,001 in 2006 and paid taxes equalling $28,311, almost 45 per cent of its income, while spending 35.6 per cent of its income on food, clothing and housing. According to the institute, 45 years ago that same family earned $5,000 and paid $1,675, or 33.5 per cent of its total income, in taxes. In 1961, the average family spent 56.5 per cent of its income on the necessities of life.

—

To pay for HC? I thought their budget was in the black?

Apr 24, 2007 - 11:19 am 46. markus:

Buddy,

if I read your account correctly you raised a family of four without health insurance, and used the money you saved on wise investments. Now, with the last of your children about to leave the nest, you’re FINALLY going to buy some catastrophic insurance.

I would describe you as extremely lucky and extremely irresponsible. Go visit some children’s hospital and I think you’ll agree. You were one serious illness away from financial ruin, for you and for your entire family.

Apr 24, 2007 - 11:30 am 47. Sandy P:

HSAs HSAs HSAs for corporations.

BCBS is coming out w/a new plan

Why does a single male need maternity and well-baby care anyway?

Apr 24, 2007 - 11:48 am 48. Buddy Larsen:

Yep. you may be right. Family of six, tho. Saved $10/yr in premiums for 30 yrs, turned it into cash-flow and a considerable retained “nut”–which asset-appreciates as well as throwing off dividends–to pass on to my kids (the last will leave the nest only to enter college, so, I ain’t done yet). Sure, I could’ve visited children’s hospitals and scared myself silly, but I chose instead to look at probabilities and statistics, and to keep my banking relationships solid –so that if a storm hit, I could finance it.

Tell me again about “irresponsible”.

“Risk” is part of life. You take risk, by being.

You can pay someone to shoulder the financial aspect of some of it, or you can not (in effect paying yourself to take it).

Apr 24, 2007 - 11:54 am 49. Steven Mitchell:

“I would describe you as extremely lucky and extremely irresponsible.”

Maybe, but if he’d had decent HSA options he could have covered the catastrophic side and still invested almost as much. In order to have such options, the government would have had to have got out of the way a lot sooner.

I don’t think the government taking over 20 years to get around to something useful is much of a ringing endorsement for the idea of central planning being the cure.

Yes, the concept of HSA is at least that old, though I think it had different names then. The HSA model would make a great model for a Social Security replacement, too: You must put some of your paycheck into retirement. Whatever you put in is yours. You have to put it into a plan that meets these regulations (to keep out the fly by nights, et. al.) If you are one of the handful of people that manages to have everything go south on them somehow, we’ll have a catastrophic option that will keep you housed, clothed, and fed in your old age.

Apr 24, 2007 - 11:56 am 50. Buddy Larsen:

And, as SM, says, key, some more of your earnings get to remain your property. You can pass it to the next generation, rather than have it evaporate at death. Over time, this is huge, for it’s virtuous effect.

Apr 24, 2007 - 12:03 pm 51. Buddy Larsen:

The Tragedy of the Commons

snip: The parable demonstrates how free access and unrestricted demand for a finite resource ultimately dooms the resource through over-exploitation. This occurs because the benefits of exploitation accrue to individuals, each of which is motivated to maximize his or her own use of the resource, while the costs of exploitation are distributed between all those to whom the resource is available (which may be a wider class of individuals than those who are exploiting it).

Apr 24, 2007 - 12:15 pm 52. Buddy Larsen:

Sorry, meant to link the wiki:
link

Apr 24, 2007 - 12:18 pm 53. markus:

Buddy, I’m aware of the concept of the tragedy of the commons, and I recognize its validity in certain situations. For instance, charging fees out of the 19th Century for grazing rights in our national parks (Clinton tried to raise them when he first took office, and was stopped by all those free-market loving Goldwater Republicans from ranching states who wanted to preserve this perk).

No one is talking about making health care free. In fact, universal coverage advocates want to get rid of the freeloaders: people without health insurance, either because they can’t afford or think they don’t need it.

If I were your financial advisor, I would urge you to make sure your youngest is covered by catastrophic insurance as well. And thank God, or whatever you believe in, for your good fortune as an uninsured businessman and family man. I?m curious: don?t you pay for any other type of voluntary insurance? Fire insurance? Life insurance?

Steven, I?ll defer to your first-hand experience with urgent care facilities. And I have little sympathy for Medicaid, an inefficient State-run gargoyle of a program (or rather, fifty programs). I also haven?t studied HSA?s enough to debate you on them. All I know is that they take lots of now-healthy people, lots of Buddy Larsens, out of our health care pools, raising premiums for everyone else.

Apr 24, 2007 - 12:48 pm 54. Buddy Larsen:

markus, you’ve never been in the scrubland cattle biz, have you? My piece of dry scrub out here will support one unit (cow/calf) per 30 acres. When grazing fees rise, less beef gets to market, and everybody pays more to eat. Food prices are hardest on the poor, right? Please, quantify some of your notions.

Apr 24, 2007 - 1:38 pm 55. Steven Mitchell:

markus, really should have stopped sooner on that lost post

On Medicaid:

I’ve worked with Medicaid and federal supervision of Medicaid for multiple, diverse states. I’ve worked on reports that went straight to federal agencies and were used to report to Congress. I have studied and sometimes alieviated inefficiences (both technical and procedural) in areas as diverse as claims processing, interaction with service providers, fraud, long-term care, preventive care, an too many others to list.

I can say in all confidence that the inefficient aspects of Medicaid are primarily a result of individuals in state administrations with an overblow faith in central planning; federal-level stupidity; and courts that made both state and federal administration seem positively benevolent and enlightened in comparison. Then there was the pocket lining. (The pocket lining that I’m personally aware of happening to be largely Democrats and their appointees. I have reason to believe, however, that this was largely an accident of the states and the times I dealt with them. I suspect that the same happened in certain Republican run states. If you want to know if this happens, observe the character and integrity of the administration at the time.)

Also, I should say that my experience of government employees has been mostly consistent in Medicaid and several other areas. They are primarily consciencious people doing a mostly thankless job for substandard pay. The exceptions seem to be caused by bad management (which you can find anywhere, people being people) and government red tape. **I’ve seen government employees almost break down into tears because the government would not let them do the work that needed to be done.** For some reason, these instances were always state employees reacting to a “one-size fits all” federal mentality. The equivalent of the military buying $600 hammers seems to exist everywhere that filling out forms gets mistaken for effective oversight.

On HSAs:

“All I know is that they take lots of now-healthy people, lots of Buddy Larsens, out of our health care pools, raising premiums for everyone else.”

Nope. HSA’s come in essentially two main flavors (with lots of variations that I won’t address here):

1. You buy more or less standard medical insurance. In addition, you put in money each year to pay for things that your insurance doesn’t cover (deductibles, copays, not eligible, simply not covered, etc.) The advantages are that you put in the money pre-tax and you put it in conveniently (out of your check on a regular basis, with premiums). The disadvantages are that the money you don’t use is typically lost, it’s bureaucratic (need to opt in for a calendar year, for example), and the structure is really more about saving tax money through tax loopholes than helping health care costs. Plus, the bureacracy involved mean these are most likely available only for people who work for mid to large corps. There are some modest efficiencies produced by removing the third-party payer out of some transactions.

2. The HSA is your main line of medical insurance. Typically, it’s attached to a catastrophic insurance plan (high deductibles, but covers most everything over that deductible). In a good year (i.e. not much wrong with you), you can expect to pay for *all* of your medical expenses. The advantages are very low premiums for the catastrophic part, slightly better tax benefits (on average), accessible to individuals and small businesses, and any money you accumulate is yours forever (it’s in a bank account in your name) that you can use for any medical expenses. The other advantages are deliberate side effects of this structure. Because it’s your money, you spend it more wisely, thus reducing health care costs and demand on resources. It’s more flexible in when you can start or stop, or how much you put in. The main disadvantage is that a couple of bad years when you start can be a rough go while you build up money in the HSA. (Ideally, a person starts very young, puts in a modest amount, uses practically none of it, and thus has a gradualy increasing cushion. They keep the cushion throughout their life. If they happen to never need it in old age, at least their heirs get it.) Another disadvantage is that these plans didn’t become widely available until 2007, and it’s unclear whether Pelosi’s congress will let it stand.

For the record, I’m on a hybrid plan that is mostly flavor #2. It’s got slightly higher premiums in return for the catastrophic coverage being defined close to the legal limit. (That is, the deductibles are as low as they can be, and the coverage often 100% once deductibles met.) Preventive care is covered fully (everyone involved recognizing that preventive care saves money for everyone and helps quality of life). I’m paying roughly the same thing I was paying before, if we have a bad year. The differences are that my (small company) employer saves money on me, and any year that I don’t have broken arms or the like, I’ll come out ahead. Or in other words, I’m not pouring premiums down a rat hole simply to avoid the possibility of cancer wiping out the family finances.

The net effect, if this was more widespread, would be to put most of the Buddy Larsens back into the premium pool, driving down catastrophic premiums for everyone, while being a better model for the small business.

Apr 24, 2007 - 1:42 pm 56. Buddy Larsen:

Yes, insure life & property, including substantial donations to local volunteer fire dept. “self-insuring” health is not all that radical. The key is you create your own reserves, instead of becoming a profit center for an insurance company. It’s not for everybody, I’ll admit. I mentioned it only to open a new vista on the usually-discussed options. I didn’t drop health insurance until I had a year’s financial liquidity in reserve, and a low debt/equity ratio.

Apr 24, 2007 - 1:48 pm 57. markus:

Thanks, Steven. I shall use your summary as a intro to HSA’s from the point of view of someone who likes them.

Buddy, I’m the wrong person to talk to about statistics: my mother was four or five times more likely to die in a car accident last year than to get the type of cancer that she did. I hope you and yours continue to stay within the statistical norms. As President Bush 41 once said, when you’re unemployed, the unemployment rate is 100%. So it goes for any other statistic.

Apr 24, 2007 - 2:03 pm 58. Terrye:

I work for a health care agency and we have people on medicaid, medicare, private pay and insurance. I have seen people on medicaid wait six months for a shower chair that costs as much as a car. It is ridiculous.

I think they should put private accounts in Social Security. I have a client who was a working man all his life. He invested a significant amount of his earnings into safe stocks from an early age. He had a quarter of a million by the time he retired. He also had a pension. The social security he paid over the years gave him the least return. If young people could take even a small part of their earnings and invest them they could have more security and they could have a nest egg of their own. One of the things I liked about Bush’s plan was the idea that people who died before retirement age could leave their private accounts to family members. My Dad died when he was in his fifties and that kind of money would have helped my mother a great deal.

Apr 24, 2007 - 2:14 pm 59. Bostonian:

Buddy,
I’m not even sure it makes sense to use insurance (of any kind) to pay for predictable costs such as preventative care.

It stands to reason that the insurance companies can predict those coases fairly well, and thus charge you above that in order to keep themselves above water.

I know, I know, supposedly the insurance company is better off in the long run if you don’t get sick, but I work in corporate America, and long-term thinking is not the norm. I find it hard to believe that these companies resist the urge to cut back paying for preventative care.

I think that health insurance has tended to disguise costs, as well as raise them (because it is a mammoth industry of workers who do not create value).

That said, I have a conventional plan myself as I am lazy about it.

Apr 24, 2007 - 2:15 pm 60. Buddy Larsen:

BTW, small point, but the tragedy of the commons does not apply to the grazing fee issue. For it to apply, the commons would have to finance the herd, with the cattlemen the only end-users (they’d have to eat all the publicly-owned cattle themselves). What we have is a public/private partnership (like Fannie & Freddie) creating a market in an essential necessity of life (food). Try looking at the G&A reports in the operators’ tax returns. “Excessive compensation” will show up there.

Now if you’re jealous of the ranchers’ outdoor lifestyles, well, who ain’t. But, a good hand is always in demand–you can head off to Wyoming and herd the little dogies yourself (and buy in if you’re smart & good).

The tragedy of the commons deserves more than a flip-off. It’s the tragedy at the heart of socialism, the tragedy that allows Utopia to feel so close, when per human nature it is so far away. The tragedy is why the good-hearted among the socialists can be reliably described as always bereft of sufficient information.

Apr 24, 2007 - 2:16 pm 61. Terrye:

markus:

My mother was blind. She had an aneurysm rupture in her brain and had to have brain surgery to deal with that and clamp off three other aneurysms and ultimately she died of cancer. Her care was long term and the cost was stratospheric. In cases like that the government will almost always end up paying for the care anyway because the other sources will have been depleted.

I honestly do not know the answer. I have dealt with government paid systems enough, from VA to Medicare to know that the systems are inefficient and prone to waste and they are slow. But then again the costs is so high that it is obscene.

Apr 24, 2007 - 2:19 pm 62. Buddy Larsen:

Terrye, but would the costs be so high if the system required that the supply and the demand met face-to-face? As in the retail sales industry?

Apr 24, 2007 - 2:33 pm 63. Buddy Larsen:

Just recently opening a website, AOL founder Steve Case’s new venture Revolution Health, is trying to develop just that sort of retail system. First level, 600 inside-Walmart health care centers.

Apr 24, 2007 - 2:38 pm 64. Steven Mitchell:

“I honestly do not know the answer. I have dealt with government paid systems enough, from VA to Medicare to know that the systems are inefficient and prone to waste and they are slow. But then again the costs is so high that it is obscene.”

Part of the problem is the refusal of the various players and the citizenry to accept the fact that the cost is inherently obscene. There isn’t as much waste in nursing homes as you might think, given the rules and expectations under which they must operate.

What they do have is obscenely lousy care (on average) for the money spent. Part of it is regulation and malpractice. Part of it is that they can’t hire good help for every nursing home. (Those nursing homes hiring nurses with criminal records that include stealing meds from patients, you think the nursing home picked that hire because the nurse was the best available? Think again.) Mostly, however, the nursing home model is inherently broken. It’s the poster child for a society that cares more about the appearance of caring than real caring. It’s a place to put granny when she interferes with the fast-paced lifestyle of junior. You could make nursing homes entirely private, and they’d be slightly better but still awful.

Home Health and Hospice are starting to make significant but real improvements. Here’s another case where government impedes solutions. In my opinion, HH and Hospice ought to be the default and nursing homes the extreme, rather than the other way around. That’s about as popular as the suggestion that we don’t need pre-school starting at age 3 to give junior and his wife state-run day care.

Apr 24, 2007 - 2:38 pm 65. Terrye:

Steven:

My agnecy is a home health care agency and there are a lot of things we no longer do that we used to do. The belt has been tightened. Such as, being old and feeble is not enough to get you help…there has to be a skill involved and chronic conditions are not covered under medicare. Medicaid is more flexible.

Yes, Buddy it might. My brother is convinced that insurance is a scam that has driven up costs for everything, but then again he does have insurance.

I know people who could get insurance and refuse to pay for it. I also know people who would pay for it but can not get it because of a health condition. Maybe it is a racket.

Apr 24, 2007 - 2:57 pm 66. vnjagvet:

Terrye:

What is your experience with long term health care insurance? Does it cover custodial care adquately?

Apr 24, 2007 - 3:02 pm 67. Buddy Larsen:

It would be a racket if the industry created the risk that it indemnifies. Y’know, like a mob protection racket.

OTOH, maybe it does, in that the risk that most terrifies us is not so much the illness or the accident, but the paying for their treatment.

Apr 24, 2007 - 3:02 pm 68. Terrye:

vnjagvet:

I have only seen a handful of cases in which such insurance was even used for home health care at my agency.

Apr 24, 2007 - 4:33 pm 69. Terrye:

Buddy:

That is right. People do not buy insurance because they are terrified of gall bladder surgery, they are terrified of the cost of it.

Apr 24, 2007 - 4:34 pm 70. Barrett:

The first mistake we make is a one size fits all solution. New channels such as Urgent Care Centers have been mentioned. We need HSAs, which will make health insurance more affordable and portable. We need to allow small businesses and individuals to form buying groups in order to deal with adverse selection issues. After all, insurance is a statistical and actuarial game. We need consumer driven healthcare not Hillary healthcare.

Most of all we need transparency into doctors, rates, performance records (e.g. how good is your doctor or surgeon – in other words, how many people has he hurt or killed) and hospital records (i.e. costs, quality measures). Right now, doctors, hospitals, insurance companies, medical device manufacturers, pharma companies and so on all benefit by the lack of transparency.

I had my fourth knee operation last year. The doctor could not tell me how much it would cost. Nor could the hospital. Neither would the insurance company. Each stands to benefit. The doctor gets to maximize his rate in order to combat the haircut he gets from the insurance company. The insurance company gets to manage it’s profit by being in the middle and taking its share. The hospital just wants you to pay so that you subsidize all the people who do not pay. It’s a farce.

People shop for car insurance, home insurance and life insurance. People are informed enough to know how to buy these products competitively.

Only health insurance is purchased from a limited menu provided through employers. Only healthcare is purchased on the basis of my friend likes his doctor so go to him.

Doctors who went to crummy schools and had crummy records would be driven out of business – as it should be. Doctors would have to compete on the basis of price and quality as would hospitals. If you want a Mercedes, you have to pay for it. If you want the rock star surgeon, you will have to pay for it. No more saying, I want the Mercedes, but make someone else pay for it.

Don’t say it will favor the rich. The rich already get the best healthcare because they pay for it. The difference is that transparency and competition will make the care available to the average consumer better in quality and lower in price.

Steven Mitchell’s other point about freezing spending and allowing us to grow our way out of our fiscal trouble is also on the mark. We have a more than $2 trillion federal budget plus what the states grab. If you can’t run a 400 million citizen country on $2 trillion you have spending problem and not a revenue problem.

Of course, the central planners like markus will argue the opposite and ask for a hopefully benevolent government to care for them – at least until it gets too expensive when they kick out the plug. Don’t think that there are no old ladies eating alpo under a state driven model.

Let’s have lots of transparency and choice. Let’s have freedom. More people will win.

Apr 24, 2007 - 6:58 pm 71. Buddy Larsen:

There is a reason that euthanasia is such a hot topic in the social democracies of Europe.

Euthanasia actually makes sense, you know, if everything is excluded from the issue except the static economics (”static” because virtue shows up only in the dynamism).

Such benevolence from the benevolent form of government! Such a wonderful element to introduce into humanity’s heart-of-hearts, the multi generational family. Can you imagine the secrets the children will know you’re carrying about grandma?

And such descent into psychological hell is so avoidable–just let the markets run the system, and let the youngsters face the reality in good time that if you want lots of money, you better get busy.

**********

“I very seriously believe that capitalism is not only a better form of organizing human activity than any deliberate design, any attempt to organize it to satisfy particular preferences, to aim at what people regard as beautiful or pleasant order, but it is also the indispensable condition for just keeping that population alive which exists already in the world. I regard the preservation of what is known as the capitalist system, of the system of free markets and the private ownership of the means of production, as an essential condition of the very survival of mankind.”

–Friedrich Hayek

Apr 24, 2007 - 7:37 pm 72. Barrett:

Buddy,

How right you and Hayek are!

Apr 24, 2007 - 8:27 pm 73. Luther McLeod:

I agree with Barrett. But where the hell were you forty years ago when I could have used all this good advice

Apr 24, 2007 - 8:32 pm 74. Buddy Larsen:

Thanks, Barrett–but why didn’t you help Luther forty years ago?

Apr 24, 2007 - 8:48 pm 75. Steven Mitchell:

Milton Friedman was saying a lot of it around 30 years ago.

Apr 25, 2007 - 9:59 am 76. Buddy Larsen:

Paul Belien in the Washington Times:

“One of the happiest consequences of the absence of government is the development of individual strength that inevitably follows from it,” he (de Toqueville) wrote.

It is exactly the loss of individual strength that has been the disease of France ever since it inflicted upon itself the totalitarian revolution of 1789. The latter turned this once great nation — which produced warriors such as Charles Martel, Saint Louis and Joan of Arc — into what Tocqueville called “a flock of timid and industrious animals, of which the government is the shepherd.” In France the Marxist left and the Bonapartist/Gaullist Right alike favor strong centralist, patronizing authority.

(end quote)

Apr 25, 2007 - 5:42 pm 77. Barrett:

Luther,

I was too young to write 40 years ago! I am just trying to do the right thing today.

Apr 25, 2007 - 5:48 pm 78. Luther McLeod:

Damn, a guy leaves out one word and look what happens Well better to go down in infamy than to have never existed. Maybe.

Apr 25, 2007 - 6:18 pm

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