Something Has to Change

We all know statistics are manipulated by politicians, lobbyists, and pretty much anyone with an agenda, to suit their purpose.  It is one of the generally confusing aspects of arriving at a sense of the truth on where we stand as a nation.  To add to our perplexity, the numbers talked about are so large as to lose all relative meaning.  After all, who’s ever seen a trillion of anything?  For practical purposes, it’s just a number that’s much larger than a billion – another number beyond reasonable use for most of us.

What good is it to state the Department of Defense’s budget in 2007 (click here to see the Office of Management and Budget (OMB) report) was $529 billion?  All we really know is that is a very big number.  Another way to look at the budget is by percentage, rather than by dollars spent.  That same $529 billion works out to be about 17% of the over all federal budget that year.  In looking at it this way, we can ask if 17% is a reasonable portion to apply to national defense.

In answering the portion question, many things come into play, things as current threat, perceived future threat, replacement of ships, tanks and aircraft, and what’s been done before.  Only what’s been done in the past is objective.  Focusing there gives a proper frame of reference over time.  Here is the Defense Department’s percentage every ten years since 1962, the year I was born, taken from the OMB’s 2009 report:

Year             Percentage

1962              46.9%
1972              33.7%
1982              24.2%
1992              20.7%
2002              16.5%
2012(est.)      16.8%

Currently, the Department of Defense takes up about a third as much of the budget compared to 1962.  Returning to that really large number, $529 billion, makes one question just where the other 83% and its huge number go.  Obviously, as the Department of Defense’s portion decreases, other department’s portions increase.

Conservatives are quick to point out that social programs make up the greatest portion of that change.  In fairness, here is the Social Security percentage for the same years:

Year             Percentage

1962              13.4%
1972              17.2%
1982              20.8%
1992              20.4%
2002              22.0%
2012(est.)      22.9%

Looking at it line by line does not tell the true story.  The federal budget has many related areas of spending that the public tends to group together.  To that end, the following graph groups the Department of Defense, Homeland Security, Civil Defense as “defense”; while Education, Health and Human Services, Housing and Urban Development, Veterans Affairs, Social Security (on and off budget) are grouped as “social services.”  The grouping seems the obvious choice but is open to debate.

As the graph illustrates, the trend in social spending is increasing while defense is decreasing.  In other words, the conservatives make a valid point regarding percentage.  In reality, all portions other than social programs are either trending at the same level or decreasing slightly.  Currently, the social services take up 55% of the budget to defense’s 23%.  Together, they take almost 77% of the federal budget leaving only 23% for everything else.  A few examples of “everything else” are the Department of Justice, NASA, Department of Commerce, Treasury, State Department, and Department of Interior.  That is not even close to all of them.

Regardless of a person’s position on healthcare reform, the trend of social services to take a larger and larger portion of the federal budget must be addressed.  As important as healthcare is, so is having bridges that do not collapse.  In the end, along with healthcare reform, we need budget reform.  We need to attack waste in every program funded with federal money.  We need to stop Medicare fraud; we need to stop buying F-22 fighter planes the military does not want or need.

Using the F-22 as an example, congress added about $1.7 billion for seven fighters.  That is less than one-half of one percent of the defense budget but it is also one type of fighter, seems the same thing is happening with the C-17 transport planes.  Even with their declining percentage, there is still room to cut waste.

What about social services, does it really have Medicare fraud?  Of course it does.  Mark Potter of NBC News reported in December of 2007 (click here to read story) that Medicare fraud cost taxpayers $60 billion a year, or $181 for every U.S. citizen.  $60 billion is about 8% of the Social Security budget in total.  A simple solution would be take just one billion from Social Security and use it to hunt down the bastards stealing from us and put them in jail.  Even if only half the money were recovered, it would be well worth it.  Just removing the fraud would pay for an annual doctor’s visit for everyone.

Washington is getting serious about spending a huge amount of money on healthcare reform; we all know the huge amount spent on two wars.  Perhaps just as much effort needs to take place in ensuring tax dollars are not squandered.  While it is easy to support healthcare reform, the voices calling for restraint must be heard as well.  Rather than name calling, it is best to phrase it this way – those seeking healthcare reform are interested in our physical health as a nation; those for restraint are interested in our financial health.  Neither side is wrong and there is plenty of common ground to be found.  Only by seeking that common ground will we provide services we want at a cost we can afford.

Without denying the need for reform in areas of healthcare, cost is a valid concern.  Just as spending all of your paycheck on new tires for your car leaves you without groceries, spending all our tax dollars on healthcare leaves the other departments  without.  Prudence demands we use the money wisely.  One thing all of us should easily agree on is to stop waste, fraud, and abuse of our tax dollars.

Our Politics Are Anything But “Social”

It is near impossible to pick up a newspaper, listen to the radio, or watch news on television without hearing someone stoke the coal-embers of fear that “socialism” will destroy the United States.  While some may truly believe it, the real goal is simply to frighten middle-class Americans back into the conservative fold.  They leverage a lack of understanding as to just what socialism is and is not.  Ironically, they use the same fear weapon that dictators use to gain control of a population, regardless if that dictator is socialist, communist, fascist, or just a plain brutal son of a bitch.

That lack of understanding is the primary reason fear exists.  In the United States, communism and socialism are thought of as being the same.  They are not.  When pundits use the term socialism, they imply communism.  Simply put, communism is a form of government where the state owns all property.  In theory, it is a democracy where every person participates in government equally.  In reality, communist governments devolve into authoritarian dictatorships or oligarchy (a small group or mob).  In both the Soviet Union and Communist China, power concentrated in the hands of a few at the cost of the population at large.  The only thing a communist government has in common with socialism is communists often include “socialist” in their name.  There never has been and never will be the utopian form of communism leftist speak of with such passion.

Socialism, on the other hand, is a group of economics theories that center on public or direct worker ownership of businesses but not necessarily property.  A good example of a socialist based economy is the United Kingdom after World War-II.  Industries like transportation and coal mining came under state control and the National Health Service was formed (the British healthcare system we hear so much about today).  While its economic policies were socialist, the United Kingdom retained both, its parliamentary system and constitutional monarchy.  In other words, its economic policy did not change its form of government.  The social experiment in the U.K. ended with the election of Margaret Thatcher but even so, the nation retains many of the social institutions and policies, such as the National Health Service formed during this time.

What is needed is an apples to apples comparison.  Socialism and capitalism are economic systems of commerce, not types of governments.  Republics and communist states are forms of government.  Adopting a socialist policy will not change the form of government.  The United States has many examples of socialist policies in effect now.  Our national highway system is a prime example and it works well.  Without it imagine the tolls we would have to pay just to go visit Grandma in the next state.  In fact, all government services are socialist in nature.  Who could imagine a private police force patrolling the streets of our cities?  We have enough problems dealing with abusive law enforcement now and its abuses on the whole are limited, imagine the outcome if profit was the motive of law enforcement.

Here is a quote by a famous American regarding the state of healthcare, see if you think it sounds socialist:

“Beyond the question of the prices of health care, our present system of health care insurance suffers from two major flaws :

First, even though more Americans carry health insurance than ever before, the [million of] Americans who remain uninsured often need it the most and are most unlikely to obtain it.  They include many who work in seasonal or transient occupations, high-risk cases, and those who are ineligible for Medicaid despite low incomes.

Second, those Americans who do carry health insurance often lack coverage which is balanced, comprehensive and fully protective:

–Forty percent of those who are insured are not covered for visits to physicians on an out-patient basis, a gap that creates powerful incentives toward high cost care in hospitals;

–Few people have the option of selecting care through prepaid arrangements offered by Health Maintenance Organizations so the system at large does not benefit from the free choice and creative competition this would offer;

–Very few private policies cover preventive services;

–Most health plans do not contain built-in incentives to reduce waste and inefficiency.  The extra costs of wasteful practices are passed on, of course, to consumers; and

–Fewer than half of our citizens under 65–and almost none over 65–have major medical coverage which pays for the cost of catastrophic illness.

These gaps in health protection can have tragic consequences.  They can cause people to delay seeking medical attention until it is too late.  Then a medical crisis ensues, followed by huge medical bills–or worse.  Delays in treatment can end in death or lifelong disability.”

This quote is taken from a Special Message to the United States Congress by President Richard M. Nixon dated February 6, 1974  (Note: 24 million was changed to [million of] in the quoted text to not give it away as being from the 70s).  Here we are, thirty-six years later, arguing about the same thing.  The only difference today, President Nixon would be labeled a “socialist commie” by Glenn Beck and the like.  It is amazing our society has change so much that Nixon’s policies are considered liberal by today’s standard.

In the end, President Obama and Congress do not have the power to change our form of government.  There are only two ways to do that, a constitutional amendment for one, and overthrowing the government for the other, and I think the U.S. Military would have something to say about the latter taking place, as well as all the gun-toting, myself included, citizens out there.

As far as constitutional amendments go, those take two-thirds of both houses of congress or two-thirds of states to propose an amendment but then it must be ratified by three-fourths of the various state’s legislators, or thirty-eight states.  It is doubtful, even if they wanted to, that any group could change our constitutional-republic form of government.

Providing reasonable healthcare will not destroy our country.  Truth is, not providing it is the real danger.  We will have to adjust our spending in other areas but that is long overdue anyway.  Healthcare needs to be part of our economic security.  Having a healthy population is just as important as having a healthy military.

So next time you hear a fear-mongering idiot bemoaning the death of America’s liberty and freedom, just shake your head and feel sorry for them.  They are no more relevant than the moron standing on the corner with a sign reading “THE END IS NEAR!”

The Healthcare Debate and Critical Thinking

Now that our elected political idiots are through wrestling with the healthcare alligator for a bit, pundits from both sides have stepped into the ring for round two.  In the one corner stand those who wish to assure us the bill is manna from heaven; the other corner has us lining up for a lethal dose of socialism and financial ruin.  What the political idiots and pundits lack is critical thinking regarding healthcare.  They simply stoke the fires of preconceived notions.

Critical thinking involves more than understanding a particular position or even all the positions of a subject.  In their book, Critical Thinking, Richard Parker and Brook Noel describe the process as “the careful, deliberate determination of whether one should accept, reject, or suspend judgment about a claim and the degree of confidence with which one accepts or rejects it.”  In other words, the process of critical thinking considers all the relevant facts to determine their importance, if any, on the outcome.

With that in mind we come to healthcare.  Our first problem comes in defining what healthcare means, are we talking about the level of care or simply its cost?  They are not the same thing and in the end, have little to do with each other.  As the current bill’s primary purpose addresses issues related to cost, that seems a logical place to focus.  We need to understand what drives up the cost of healthcare in America and how to reverse the trend.

Of course, there is more than a book’s worth of material regarding the various reasons healthcare costs rise so dramatically.  Rather than cherry-pick a few items to support a view, it is better to boil them all down into a few categories.  There are two broad categories that breakdown into subcategories, costs that add value and costs that do not.

Again focusing on one area, the obvious goal is to eliminate the costs that add no valued to healthcare.  A great example of such a cost is the profit paid to the insurance company’s shareholders.  A for-profit company has a responsibility to make a profit.  It is why shareholders invest in the company.  This profit is the subject of fierce debate, President Obama even called it record-breaking in a June 2009 press conference, a statement PoltiFact.com calls false, by the way – (click here to read).  Rather than addressing the issue directly, both sides use profit as a political football used to score points.

What is not debated though is insurance companies make a profit.  That adds to the direct cost of healthcare.  Industry wide, net profits average around 3.3%.  According to the Center’s for Disease Control and Prevention (CDC), in 2007, private insurance paid for approximately 36% of all healthcare costs in the U.S. (click here to read the full report).  Using their 2007 expenditure number of $2.2 trillion, that means the insurance companies’ profits works out to about $27.3 billion or $82 for every man, woman, and child in the United States, even the uninsured.  A non-profit insurance system would save both citizens and businesses that $27.3 billion per year.

At first glance, a non-profit, single payer system would seem an option worth undertaking.  This is where critical thinking comes in.  Are there any examples of single-payer systems set up by the federal government currently?  Yes, the National Flood Insurance Program.  As their website put it:

“In 1968, Congress created the National Flood Insurance Program (NFIP) to help provide a means for property owners to financially protect themselves.  The NFIP offers flood insurance to homeowners, renters, and business owners if their community participates in the NFIP.  Participating communities agree to adopt and enforce ordinances that meet or exceed FEMA requirements to reduce the risk of flooding.”

While no system is perfect, NFIP provides a cost-effective means for renters and homeowners to protect themselves from flooding related damage costs.  Critical thinking demands we look at the latter part of the statement in detail – “Participating communities agree to adopt and enforce ordinances that meet or exceed FEMA requirements to reduce the risk of flooding.”  The government program provides a service but requires individuals and communities to take basic precautions to protect themselves and reduce their exposure to flooding.  This reduction in exposure is key to reducing costs.

A non-profit, single-payer system will work for healthcare but the same prudence and risk aversion needs to apply.  To put it simply, we need to take care of ourselves, lose weight, stop smoking, and keep in reasonable shape.  By concentrating on prevention with tools like routine check-ups, we avoid the logarithmically higher costs of the post-onset of illness treatment.

The insurance industry’s profit is only one example of critical thinking applied to healthcare and by no means is it examined in full.  Rather it illustrates how applying the process to a problem leads to solutions, and there can be more than one for a particular problem.  It removes rhetoric from the equation and allows for merit-based debate.

The passing of the current bill is only the beginning of the process.  Over the next few years it will change and undergo metamorphosis into a totally different law.  What is needed now is less political fear-mongering and more critical thinking.  Only then will we have a bill that is effective and adds value to our lives.  Otherwise we will end up with another in a long line of useless government programs.

The Cost The Public Unwittingly Pays

Back in when I was in the military, I learned a saying, “there is no need to defuse a bomb that has already gone off.”  For the most part, the current healthcare debate is a bomb that has gone off.  The U.S. government currently controls the majority of the healthcare dollars the nation pays.  The problem we have is understanding this fact due to its complexity.  This complexity allows pundits to twist and mold data to fit any argument the wish to make, resulting in frustration, confusion, and a lack of trust for all concerned.

If you want to upset a group of people, you only need to bring up the subject of healthcare reform.  No matter the group, opposing opinions are bound to exist, opinions, for the most part, based on hysterical news coverage that has little to do with reality.  We become embroiled with arguing over topics as single payer, mandated insurance, and the dreaded “S” word – socialism.  When people are confused, the best choice seems to do nothing at all, maybe this is the true objective of the pundits, to confuse us and maintain the status quo.

In reality, the government directly controls programs like Medicare, Medicaid, and various other more limited plans.  According to the government’s Center for Medicare & Medicaid Services, these programs, and health department budgets account for approximately 53% of our National Health Expenditure (NHE).  The NHE is the total amount of money spent in the United States per year from all sources on healthcare; the 2009 estimate is around $2.3 trillion.

In addition, there is another cost we indirectly pay that adds to the percentage paid with tax dollars and it is hidden from view – healthcare subsidies to businesses.  Businesses in the U.S. enjoy a $200 billion a year tax write-off on the cost of healthcare.  In other words, the U.S. government took in $200 billion less last year than it could have giving big business a break.  Taking this money into account, our government controls about 62% of the total cost paid for healthcare each year.

The problem is not the tax break, it comes from who benefits for the $200 billion – only businesses that provide healthcare.  This means the rest of America subsidizes the healthcare of businesses like General Motors and A.I.G. and the little guy goes without.  This subsidy, in effect, is a Medicaid-style payout.  It is a quasi-tax all Americans pay to the benefit of a few.    The $200 billion loss affects the general revenue, requiring a higher debt level to make up the difference; it adds to our national debt every year.  It is a bad deal for all involved, except big business of course.

In the end, it is not a question of should we have government paid healthcare, we have it now.  The only real debate is in how to create a system that makes sense and benefits all Americans rather than select groups.