The beat goes on

Posted: 08/19/2016 in Screwed
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Robert Reich has, once again, laid out the obvious:

The best argument for a single-payer health plan is the recent decision by giant health insurer Aetna to bail out next year from 11 of the 15 states where it sells Obamacare plans.  Aetna’s decision follows similar moves by UnitedHealth Group, the nation’s largest insurer, and Humana, one of the other giants.  All claim they’re not making enough money because too many people with serious health problems are using the Obamacare exchanges, and not enough healthy people are signing up.

The problem isn’t Obamacare per se. It’s in the structure of private markets for health insurance – which creates powerful incentives to avoid sick people and attract healthy ones. Obamacare is just making the structural problem more obvious. In a nutshell, the more sick people and the fewer healthy people a private for-profit insurer attracts, the less competitive that insurer becomes relative to other insurers that don’t attract as high a percentage of the sick but a higher percentage of the healthy. Eventually, insurers that take in too many sick and too few healthy people are driven out of business. 

If insurers had no idea who’d be sick and who’d be healthy when they sign up for insurance (and keep them insured at the same price even after they become sick), this wouldn’t be a problem. But they do know – and they’re developing more and more sophisticated ways of finding out. 

It’s not just people with pre-existing conditions who have caused insurers to run for the happy hills of healthy customers. It’s also people with genetic predispositions toward certain illnesses that are expensive to treat, like heart disease and cancer. And people who don’t exercise enough, or have unhealthy habits, or live in unhealthy places. 

So health insurers spend lots of time, effort, and money trying to attract people who have high odds of staying healthy (the young and the fit) while doing whatever they can to fend off those who have high odds of getting sick (the older, infirm, and the unfit).  As a result we end up with the most bizarre health-insurance system imaginable: One ever more carefully designed to avoid sick people.

If this weren’t enough to convince rational people to do what most other advanced nations have done and create a single-payer system, consider that America’s giant health insurers are now busily consolidating into ever-larger behemoths. UnitedHealth is already humongous. Aetna, meanwhile, is trying to buy Humana.  Insurers say they’re doing this in order to reap economies of scale, but there’s little evidence that large size generates cost savings. 

In reality, they’re becoming very big to get more bargaining leverage over everyone they do business with – hospitals, doctors, employers, the government, and consumers. That way they make even bigger profits.  But these bigger profits come at the expense of hospitals, doctors, employers, the government, and, ultimately, taxpayers and consumers.

So the real choice in the future is becoming clear. Obamacare is only smoking it out. One alternative is a public single-payer system. The other is a hugely-expensive for-profit oligopoly with the market power to charge high prices even to healthy people – and to charge sick people (or those likely to be sick) an arm and a leg.

And you can guess which way the market will go.


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Of course those of you with a more jaded outlook know that sooner or later, the XL folks will get their way (and their pipeline).  Money always wins in American politics.  As if to prove that point, another pipeline, almost as long and disaster prone as the XL, has been quietly approved by your government.  Called the Dakota Access Pipeline Project (DAPL) (also known as the Bakken Pipeline), it is ready to lay 1,172 miles of 30-inch diameter pipe from North Dakota down to Patoka, Illinois, where it will join other pipelines going to refineries and markets in the Gulf and East Coast.  Of course this direct line to the shipping centers is being touted as a solution to our own energy dependence, even though the oil will never be sold in our country. 

Like the XL project, Bakken has also promised tons of jobs for everyone.  And also like the XL project, those promises are lies.

According to Dakota Access’s DAPL fact sheet, the pipeline will create 8,000 to 12,000 construction jobs. An earlier draft of those figures claimed 7,263 “job-years” to be created in Iowa alone. Not so fast, says professor David Swenson, associate scientist in the Department of Economics at Iowa State University. Swenson crunched the numbers himself, and came to a much more modest conclusion: 1,500 jobs total per year in Iowa for the course of construction. And given that most of these jobs are skilled, Swenson expects many of these hires will be from out-of-state, as Iowan contractors specializing in large-scale underground pipe-fitting and welding are scarce. The long-term forecast for job creation is even bleaker. The Des Moines Register reports that there will only be 12-15 permanent employees once the pipeline is completed. (DAPL has since walked back its job estimate slightly).

Even though the pipeline has already received official approval, some people are still trying to tie it up in court.

The pipeline will cross through sacred lands and pass under the Missouri River twice. For the Standing Rock Sioux, the Missouri provides drinking water and irrigation, while its riverbanks grow innumerable plants of cultural import, including sage and buffalo berries. The tribe launched a campaign called “Rezpect Our Water” and staged a 500-mile relay race in protest, hoping to sway the Army Corps of Engineers in the permitting process. Last weekend, a group of 30 Native youth completed a three-week run from North Dakota to Washington, DC, where they delivered a petition of 160,000 signatures opposing the pipeline’s construction.

Now, even though the Corps has given the go-ahead, the tribe has not given up the fight. They recently filed suit against the Corps in federal court. The suit seeks an injunction, asserting that the pipeline will “damage and destroy sites of great historic, religious, and cultural significance,” a violation of the National Historic Preservation Act.

But, in the long run, we all know that money talks, and the lives of people don’t matter when there’s a profit to be made.  But that shouldn’t mean we just give up and roll over.  Remember, it’s the profits that matter.  If we can force these companies to dig deep and pay for their “accidents”, it might just become too expensive to be worth the bother.


Be seeing you.

There’s still more news from Flint, Michigan:

The Flint water crisis wasn’t just terrible for the thousands of its residents who were exposed to lead. It’s also been bad for the city’s coffers — really bad.

According to Peter Muennig from Columbia University’s School of Public Health, switching the water supply from Lake Huron to the Flint river — a move that was intended to save the city $5 million — will actually cost the city nearly $460 million.

That figure doesn’t just cover emergency water and medical care — it includes social costs, including “lower economic productivity, greater dependence on welfare programs, and greater costs to the criminal justice system,” as James Hamblin points out in The Atlantic.

Young people are particularly vulnerable to lead poisoning, which has serious consequences on developing brains and can result in intellectual disabilities and anti-social behavior. And state officials have advised that all children under six in Flint – an estimated 8,000 to 9,000 kids – should be treated as though they’ve been exposed.

Two years after the lead crisis started, the water in Flint is still unsafe to drink without a filter.

Why, you may ask, do politicians do this?  Is it, as some suggest, because they can’t think past the next headline?  No, I don’t think that’s it.  I believe it’s because they’ve decided that government needs to be run like a business.  And in a business, it’s not the final cost that matters.  It’s which pocket to which the expense is charged.  As long as they keep shifting the cost around to different pockets, they firmly believe no one will be able to blame them for the total expense.  But Hamblin has proven them wrong.  Now it’s time for the voters to do the same.


Be seeing you.