25 May 2010: Health Care Craziness
Pardon me for harping on the topic, but I just read an article about medical identity theft, and it struck me as, well, surreal.
I mean, the object of all our complicated health care arrangements is that everybody should have health care. If everybody has health care, why should it make any difference if somebody steals somebody else’s health care? Why would anybody steal somebody else’s health care if everybody has it?
Because we have arranged so that if your employer can afford to pay for health care then your employer pays for it, otherwise if you can pay for it you do, or if you can’t pay for it then the government will help, but if you don’t want it you have to pay anyway but you won’t get it.
In some of the countries of “old Europe” they just have the government pay for it and whoever can afford to pays a tax to cover the government’s cost. I don’t know why we don’t do it that way. Maybe because it’s too simple for our technically savvy minds, or maybe it’s because we’re an old country and can’t give up our traditions. Send the old man a comment on this article
25 April 2010: Blame for Failure
Who should be blamed when a medical device fails?
A defibrillator, or ICD (implanted cardioverter-defibrillator) is surgically inserted under a patient’s skin and connected by wires to the patient’s heart. If the patient goes into “cardiac sudden death” the ICD is supposed to deliver a shock to the heart to get it beating properly again.
Some of the ICDs made a few years ago by Guidant Corporation had a problem. In rare cases when a patient went into “cardiac sudden death” the ICD failed to deliver a shock and the patient died. Guidant did not report the problem when they learned about it and continued to sell these ICDs to doctors who implanted them in patients. As of the time I write this, a Federal court is considering a plea agreement in which the company would plead guilty to two criminal misdemeanors and pay a $296 million fine. You can read about it here.
The two doctors who originally blew the whistle on Guidant don’t like the plea agreement. They want individuals, not corporations, to be held responsible. In fact, because Guidant is now owned by Boston Scientific (another medical device company), the fine would hurt only the stockholders of Boston Scientific, a company that neither made the faulty ICDs nor covered up the problem.
Assigning blame after patients die won’t protect future patients. Companies don’t want to report problems with their products because doing so would reduce their sales and cut into their profits. They compare the expected penalty for a coverup with the expected loss in profits and if they think the fine is less than the loss they go with the coverup. If penalties are imposed on individuals you have a similar difficulty. The people responsible for reporting device problems have to choose between possibly getting caught if they cover up and probably losing their jobs if they don’t.
Only another set of incentives can prevent future coverups of this kind. Send the old man a comment on this article
20 April 2010: New Credit Card Fees
Thanks to the new credit card law, the banks are now looking for new ways to get money from cardholders. My credit card was just replaced with a newer “better” card with a different name but the same number. This time the phone call to the credit card company to verify receipt of the card was answered, not by an automated system, but by a person.
The person was trying to sell me enhanced credit card protection - for $7.99 a month they would check my account daily for unauthorized charges. I responded by pointing out that my liability for unauthorized charges was limited by law to $50, and a monthly fee of $7.99 would quickly add up to a good deal more than that. After the person and I wished each other a pleasant day and we mutually terminated the call, I also realized that they check my account daily anyway, because they would be liable for the rest of the unauthorized charges above my $50 share.
The banks apparently want us to pay for what they do for themselves. Of course they depend for survival on what their customers pay them, but as customers we want to get something for what we pay. Send the old man a comment on this article
14 April 2010: Whose Government?
An Op-Edder in The New York Times this morning was nattering about what kind of government we ought to give Afghanistan. Should we let Hamid Karzai get away with his stolen election victory, without worrying about anything except what we can use Afghanistan for, or should we maintain a presence there until we have established a real democracy? Skipping, of course, the question of whether we can give them democracy.
It’s beginning to look as though a one-word mistake was made in the text of the Declaration of Independence. It should have read:
... That whenever any Form of Government becomes destructive of these ends, it is the Right of the [People] Americans to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness....
The correction would not have altered the original intent of the document, but as applied to other countries it gives us the authority to design and build their governments to our specifications. Send the old man a comment on this article
13 April 2010: Who Was Lehman Brothers?
It’s been over a year since my last posting to this page. Not that I haven’t been angry. It’s just that I’ve been sidetracked by other things I have to do, and by the time I get around to being able to post here I’m not angry enough to take the trouble. But it’s going to be different from now on.
An article in The New York Times today describes how Lehman Brothers - the too-big-to-fail investment banking firm that was allowed to fail - bought a small company in 2001, renamed it “Hudson Castle,” and used it at least until 2004 to hide its own shaky investments. “While Hudson Castle appeared to be an independent business, it was deeply entwined with Lehman. For years, its board was controlled by Lehman, which owned a quarter of the firm. It was also stocked with former Lehman employees. None of this was disclosed by Lehman, however.”
My question today is: who used it to hide the investments from whom?
The Times says “Lehman” did this, “Lehman” did that, “Lehman” didn’t tell its shareholders. Who was this “Lehman”? No artificial person has any volition of its own. Who did it? Not its owners. Its board of directors? Its managers?
Lehman, like any corporation, is owned by its shareholders. The board of directors is elected by the shareholders. That should mean it represents the shareholders. The officers of the corporation, in turn, are appointed by the board, so they work for the board. Everybody else in the company is hired by the officers, or by somebody hired by the officers. Everybody in this whole chain of command is supposed to be working for the owners.
The Times says “Typically, companies are required to disclose only material investments or purchases of public companies. Hudson Castle was neither.” Let’s get to the reality of what happened. What The Times calls “Lehman” was in fact a bunch of people entrusted with the care of a vehicle called Lehman, who took it careening down Wall Street on a wild joyride without the knowledge or consent of its owners and smashed it up.
That’s criminal. Send the old man a comment on this article
2 March 2009: Democracy
An article last month in The New York Times Magazine describes a brief interlude of “democracy” in Mauritania: “In April 2007, Sidi Ould Cheikh Abdallahi became president after the country’s first transparent election. Cooperation with the United States on security issues immediately resumed.... The democratic movement in Mauritania did not last long. Last August, Abdallahi’s generals overthrew him after he tried to fire them. The American partnership with Mauritania promptly collapsed....”
There never was democracy in Mauritania. Democracy is not established simply by holding elections. Democracy requires a presumption that whoever is elected will govern.
Abdallahi was elected but did not govern. The generals let Abdallahi sit in his office as long as the pretense of democracy brought them American support. When Abdallahi tried to depose the generals the pretense of democracy was no longer profitable to them. American support would mean nothing to them if the Americans supported someone else. They deposed Abdallahi and let the military dictatorship, which had been hidden behind a pretense of democracy for sixteen months, become visible again. Send the old man a comment on this article
23 February 2009: The exclusionary rule
The Fourth Amendment to the Constitution of the United States says:
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
This amendment is the basis for the “exclusionary rule,” which provides that evidence obtained by an unlawful search is not admissible in a trial and the government can’t use it for any purpose.
Seems reasonable to me. If you took something you shouldn’t have taken, you shouldn’t keep it or use it; you should apologize, return it, and do whatever you can to undo any damage you caused when you took it.
But people who ought to know better, including Justices of the Supreme Court of the United States, have other ideas. They think if the government takes something it shouldn’t have taken, it should keep it and use it, as long as it mistakenly thought it was really entitled to take it. Does that make sense?
The basis for that idea was succinctly stated (though not for the first time) by Judge (later Justice) Benjamin Cardozo in People v. Defore (1926): “Should the criminal go free because the constable has blundered?” That’s putting it backwards. If the Constitution had been obeyed, the criminal would go free because the search would not have been made.
The question should be, “Should the criminal be convicted because the constable has blundered?” If the constable had not blundered, the search would not have been made, the evidence would not have been found, and the criminal would go free. Is that a good reason to condone unlawful searches?
The New York Times, January 30, quoted Chief Justice Roberts in the majority opinion in Herring v. United States as follows: “To trigger the exclusionary rule, police conduct must be sufficiently deliberate that exclusion can meaningfully deter it, and sufficiently culpable that such deterrence is worth the price paid by the justice system.” That price “is, of course, letting guilty and possibly dangerous defendants go free.” Does the Chief Justice really believe that letting criminals go free “can meaningfully deter” deliberately improper police conduct?
- Deliberate police conduct in violation of the Fourth Amendment should trigger a criminal indictment against the offending police officers.
- To trigger the exclusionary rule it should be sufficient to show that the search was not authorized by a valid warrant.
- To avoid the exclusionary rule it should be necessary to show, not that the violation was unintentional, but that a lawful search would have found the same evidence.
Surely the framers of the Fourth Amendment were aware of its consequences. The price, “letting guilty and possibly dangerous criminals go free,” is implied by the amendment itself. It was understood that if some searches were not made, some evidence would not be found, some criminals would go free, and in fact some crimes would never be discovered. To refuse now to pay that price is to devalue the Constitution. Send the old man a comment on this article
27 January 2009: U.S. health care
We have by some measures the best health care in the world, and by other measures the worst health care in the so-called developed countries. If you have money you come here from Saudi Arabia for health care. If you don’t have money you go to Mexico from here.
Some people have suggested that since Medicare works, we ought to have “Medicare for all.” That won’t work. Medicare depends on “reasonable and customary” charges, that is, the market rate, to decide how much it will pay for each treatment. “Medicare for all” will replace the market, and there won’t be any more “reasonable and customary.” Besides which, the perverse incentives to avoid liability and to prefer the most expensive (and remunerative) treatment will persist.
I’m beginning to think that the only way to fix the system is to have all health care workers, doctors included, work for the government on salary. Send the old man a comment on this article
4 January 2009: Sidewalk repair arithmetic
Some of us are arithmetically challenged; some, I hope, are not. If you can tell a billion from a million and do simple arithmetic with large round numbers, the following will be clear. If not, you will be forever at the mercy of prevaricating politicians.
To fix, or not to fix, that is the question.
Whether ’tis cheaper in the end to keep
The sidewalks always new and smooth and safe
Or let them break, and people fall on them
And pay for it in lawsuits.
This morning’s New York Times had a story, referring to New York City, about “a group of trial lawyers who hired a mapping company to scour the streets and sketch every crack, chink and pothole, with the ostensible purpose of giving the city notice of potential hazards it must fix, or face the consequences. When someone fell and was injured on a city sidewalk - the most frequent ground for a personal-injury lawsuit against the city - he could present the map in court as hard evidence of the city’s liability.”
The focus of the story was that courts were beginning to challenge the accuracy of those maps. The focus of my gripe is that the city ignored the maps, let the cracks in the sidewalks remain unrepaired, let people fall and be injured, and paid out compensation when they sued. That was stupid.
According to The New York Times, the city “paid about $600 million in sidewalk injury cases from 1997 to 2006.” That’s about $60 million a year, and I say that $60 million could have been better spent.
Beginning in 1982, according to the same story, the lawyers “produced more than 5,000 maps a year, each depicting several city blocks marked with hundreds of symbols” that “denoted more than 700,000 sidewalk hazards each year,” but a city spokesman said “What they found is that a vast majority were minor defects ... Many defects weren’t there. It became a superfluous and impossible task.”
Superfluous? Impossible? Each map had several hundred symbols and identified an average of about 130 defects, most of which were insignificant, and each map covered just a few blocks. Hundreds of symbols? How many minutes does it take to read a symbol? How long does it take to walk a few blocks? One person could evaluate one map, on the streets, in four hours, spending about two minutes examining each alleged defect, and spend the other half day in the office logging the evaluation. Five thousand maps a year equals about 25 maps per working day, so a staff of 25 inspectors could handle the job. If each inspector costs the city $100,000 a year in salary and benefits, that’s $2.5 million a year, just a small part of the $60 million the lawsuits cost.
What about the repairs? According to an article in one of New York City’s Parks Department publications, repairing a defect caused by a tree root “can reach as much as $1,000 per tree,” which presumably involves replacing one or two 4 by 4 foot squares of concrete and adjusting the tree’s root system. At that price, repairing all 700,000 defects would cost less than $700 million. But they don’t have to repair all of them. “The vast majority” could be ignored. What does that come down to? We don’t know exactly how many would have to be repaired or what the real cost would be. One-tenth would be at most $70 million, not much more than the cost of the lawsuits, and the sidewalks would be free of defects and people would not be injured by them.
One more note. Back in 2003, an article quoted New York’s Mayor Bloomberg as having said that “It would cost the city billions of dollars to hire sidewalk repair crews to repair all sidewalk defects and keep the sidewalks perfectly free of defects.” We just calculated that repairing all real and imaginary defects would cost about $700 million a year, but the cost of repairing only the real defects would be a lot less. So where did the “billions” come from? Send the old man a comment on this article
1 January 2009: What next?
OK, it’s New Year’s Day, and time for New Year’s resolutions, the first of which is to get out of the recession. This morning’s New York Times tells us, among other alarming statistics, that the loss of value in just that much of the stock market as is measured by the Dow Jones Wilshire 5000 index - from the 2007 peak to the end of 2008 - is $6.7 trillion.
To put that in perspective, that’s about $22,000 per capita - per man, woman and child in the United States. Put that another way, it’s nearly half of last year’s GDP (gross domestic product). Spread over every worker in the U.S., it’s as though half your salary for the year had been blown away.
Maybe that figure is not an accurate estimate of how much money disappeared in the financial meltdown. But it's a measure of just part of the amount of personal wealth that we, collectively, perceive that we have lost. We see ourselves as being poorer than we were last year, and because of that we’re spending less. And because we’re spending less, goods stand unsold on the shelves, workers are laid off, and investors borrow less and hold back the money they have.
That money has to be put back into the economic system. Our federal government, in its wisdom (however reliable that may be), put a lot of money back at the top to prevent more money from disappearing. But that money is not moving, because consumers still think they’re poor. Now money has to be put in at the bottom, so people will buy things, workers will be hired to make and sell things, and investors will put their money into enterprises that make and sell things.
Where’s the best place to put the money? State aid: state governments are cutting back on essential programs, reducing their payrolls, giving less to the needy. Street-level non-profits, like soup kitchens: they need more money and if they get it they will spend it. Infrastructure projects (think WPA): they not only employ people, but they build up an environment that makes it easier for new enterprises to form and old businesses to grow.
As Paul Krugman wrote just a few days ago in The New York Times, “Our capacity hasn’t been diminished;” the shrinking economy is “the result of a slump in private spending.” We need to bring back the spending. Don’t think if you build it they will come, because they may come, but they won’t buy if they don’t have the money. Think if you buy it they will make it. Send the old man a comment on this article
