A long time ago, someone gave me what I think was the best advice I have ever received regarding teaching. It was as follows. If one student doesn’t understand you, it is that student’s fault, but if several students don’t understand you, it is your fault. Looking at that bit of wisdom always makes me hark back to my first day of teaching, when, after lecturing for fifteen minutes with my back to the class, I turned around to see pretty much every student in the class staring at me with his or her mouth open. Thanks to this principle, I was able to send the class home and promise to do much, much better next time.
Over the years, I have come to realize that there is a far wider application for this brilliant observation than just teaching. In particular, it has a very specific application to governance. If you are truly a citizen of the United States, then you operate on the principle that government is meant to serve the people by maintaining equality and protecting the inalienable rights of every human being. By “government”, we in the United States mean “we the people”, served by representatives. Thus the term “representative democracy.” So a government fails, and, by implication, we all fail, because, as members of this nation, we are each responsible for maintaining that equality and those rights.
We cannot, of course, eradicate inequality and the violation of rights. There will always be those who will game the system or ignore or trample on the rights of others. What we can do, however, is be vigilant to see where major and continuing violations of those rights occur and address the issues that are creating or allowing those violations. To put that in terms of the above aphorism, if one, or a very few, people, suffer a violation of their rights, it is the fault of the offenders. If, on the other hand, there is a widespread injustice, we as citizens of the United States are failing and need to do whatever we can to reduce or eliminate that injustice.
So, let us apply the principle. There is always crime in America, as in any population. There is always drug and alcohol abuse. There are always murders. If, however, drug abuse and murder escalates, then we need to look to ourselves to see if we are somehow failing as a community. Likewise, if there is some fringe group of non-Americans who do not like us, that is their problem. If, however, large segments of the world population express profound hatred of our governmental or business activities, then we need to see if we are in fact violating the rights of those populations.
Unfortunately, a great deal of this is true today. Crime in general, and murder in particular, is rising drastically across the nation. Drug abuse has skyrocketed, particularly with heroin. And in large populations in the world, America is looked upon as a country that routinely violates people’s rights and uses devious business practices purely for profit.
What do we do about it? Well, I can certainly hear the voice of those who say that we should do nothing, that whatever America does is okay, that it is in fact disloyal or even treasonous to suggest that we are to blame or that we have done anything illegal or immoral as a nation. Such talk is at best naive and at worst disingenuous. We are draining the American population of its wealth and opportunity and handing it over to superwealthy few. We are in desperate need of funds to adequately — and justifiably — run this country. Our roads are a mess, our schools are being drained of money, our health system is sucking us dry. People are despairing, and, when they despair, they do things that add to the damage.
We have, for far too many years now, reduced our tax income and then paid for the deficit by eliminating the basic benefits that our government was created to supply. The myth that reducing taxes would somehow be of benefit to us all has been exploded in a sea of violence and misery. We have, in sum, substituted private gain for public rights, and either we will end that failed policy or it will end by itself, violently.
Tag: government
THE ILL LOGIC OF TAX REDUCTION
In the state of Wisconsin, Scott Walker came into office with the state having a surplus. He used that surplus to give a very large tax break to the wealthy and to corporations. The surplus was not sufficient to make up for the reduction in state income, so Walker cut benefits to the poor and the middle class. For instance, he made various municipal and state employees pay more for their fringe benefits. Thus a school teacher making $50,000 a year was required to pay $600 a month more for health benefits. In effect, he reduced a middle class worker’s income by $7200 annually and gave a several thousand dollar tax reduction to someone making $500,000 or more. Now, we discover that, because of these tax reductions, Wisconsin has a two billion (2,000,000,000) dollar deficit. Walker’s solution? Cut middle class income more and give the wealthy another tax break. And, when that tax reduction causes yet another deficit, … Well, the rest follows logically.
It is, however, not the logic that is in question here. It is the principle that gives birth to that logic, a principle that those who pursue such logic are loathe to discuss. One would assume that this principle is the time-honored shibboleth of conservatism, namely, that smaller government is better government. To put it another way, if we have a choice of doing something through government or through private industry, then we should choose private industry because it is more efficient and effective. That principle has been proven true far too many times to be doubted. Private effort, whether driven by profit or by charitable dedication, has time and again provided results that no governmental bureaucracy could possibly have accomplished.
You will notice, however, that the conservative principle is only effective if we have a choice. It is universally admitted and goes without question that there are areas where we do not have a choice. The most obvious of these is the area of military defense. It is simply incovceivable that we could provide anything approaching an adequate defense of this country by use of private armies. Even in defense, however, we use private industry to equip our armed forces, because private industry can do that more effectively than any kind of state-run manufacturing system.
So now we can come to the real issue for discussion between rational conservatives and rational liberals: in what areas do we not have a choice? The answer depends, ultimately, on what the ideals are that constitute your form of government. If, for instance, your form of government is based upon the ideal of an all-powerful state, then you likely will never have a choice. Government must do everything, must nationalize industry and control communications and eliminate the profit motive altogether. Such was the disaster of the Soviet Union.
What, then, is the American ideal? “We hold these truths to be self-evident, that all men are created equal, that each is endowed by his creator with certain inalienable rights, among which are life, liberty and the pursuit of happiness…” To put that another way, to be an American is to be unconditionally dedicated to seeing that all human beings are provided with those rights fundamental to life, liberty and the pursuit of happiness.
Herein, I propose, lies the difference between true liberal and true conservative. Both camps must, on pain of losing their right to be called American, believe that every human being deserves these fundamental rights. I think it obvious from the fact that they are the constant topic of conversation, that these rights include the right to basic medical care, the right to a living wage, and the right to an education befitting their abilities. A rational discussion between liberal and conservative would be about the best means to provide these rights to all Americans. There are those rational liberals who make a good case that, for instance, on medical care, it is only the government that can implement a program of adequate medical care for all Americans. There are rational conservatives who make an eloquent case for the argument that private industry could do a better job of providing that care.
The logic of each of these positions is both formally and substantively sound, because both positions honor the fundamental ideals that constitute what it is to be an American. There is, however, rampant in the public fora, a far less sound logic, a logic that, while specious, is diseased by its founding principles. How else can one explain a policy of cutting education, cutting health care, cutting wages and benefits? The principle driving such policies can only be: that is good which profits me. This diseased logic, this ill logic, is fatally flawed at its core. It is flawed because it is an abandonment of the American ideal for the ideals of self-interest. It not only serves itself; it promotes itself by encouraging others to serve themselves. It promises its advocates to reduce their taxes, eliminate their need to be safe and to protect the environment and honor the rights of others.
This appeal to self-interest is, I put it to you, is a core problem in American politics. It may not be new, but I doubt that it has ever been more pervasive or more loudly and openly promoted. Taken to its logical end, oligarchy, it would end with the abandonment of the American ideal that stands in such stark contrast to it. I know that every human being deserves basic medical care, basic education and a basic living wage. I am convinced that every rational conservative in American agrees. I fear that liberals and conservatives alike are being ignored and their ideals rejected in the name of self-interest.
THE COST OF HEALTH CARE: AN IMMODEST PROPOSAL
The issue of health care in the United States is presently a political football, and, because it is seen as a useful political tool, current discuuion of the topic, if one can call them that, bear little resemblance to reasoned discourse. If one were able to put politics aside and view the subject on a rational basis, two things about health care in the United States would appear inescapably true. The first is that we do, in fact, have a system of universal health care in the United States. Some way or other, if you get sick enough, you will get medical treatment of some sort. The second inescapable truth is that, for our Byzantine and hole-riddled health care system, we pay far more than any other developed nation in the world.
From these two inescapable truths, there comes one inescapable conclusion. The real core issue in health care is not whether we should have a system of universal health care coverage. We have that, willy nilly. To twist the old saw about philosophy, not to have a system of universal health care is to have a system of universal health care. The real core issue is how to make one’s systme of health care cost efficient. The need for health care is universal, like air and water. There is no question as to whether we should pay for it. We will pay for it, are paying for it, whether or not we do so in a rational manner. The only subject open for rational discussion is how we might provide adequate health csre in the most cost-efficient fashion.
When one approaches the subject of health care in the United States in this reasoned fashion, an odd paradox appears. One of the problems with the cost of health care in the United States is that, rather than too little insurance, we have too much. A large segment of the population is covered by a multiplicity of policies for medical expense. To illustrate, suppose that a truck driver gets injured in a multi-vehicle accident while in the course of his employment. He likely has medical insurance to cover his medical bills. He also has coverage for these bills through worker’s compensation insurance. He also has a medical pay provision in his truck insurance to pay the bills. Each of the other vehicles also has a medical pay provision to cover the same bills, and each of the vehicles’ liability insurance coverage has exposure for the bills. If the truck driver’s injuries are sufficiently severe, he might also end up with coverage from Medicare and/or Medicaed.
Each one of these various policies was underwritten with the potential for the truck driver’s bills in mind, and therefore coverage for this one set of bills was redundantly charged in the premium of each of these policies. There is, however, a far greater expense that arises from these redundancies. Each of these insurers, aware of the likelihood of other available coverage, have place in its policy a provision excluding payment where other coverage is available and allowing it to recover any payments it made if it is determined that another coverage is applicable. This is generally referred to as a subrogation clause. So, for instance, if the truckdriver has his bills paid by his medical insurance, that company may puruse the worker’s compensation insurer for reimbursement. If the accident is determined to be the fault of one of the other drivers, then the worker’s compensation carrier can pursue the liability insurer of that other driver. Each one of these insurers has an entire subrogation department dedicated to the pursuit of this kind of reimbursement.
The utter wastefulness of such a system may be illustrated by a simple thought experiment. Imagine that there were only two insurers in the entire world. Imagine that the two insurers were of identical size and ability. They each carried the same lines of coverage. They each had the same number and type of clients, and they each had the same number and kinds of claims. They each had subrogation departments of identical quality and diligence, and they each achieved the same success in pursuing their subrogation rights. What would be the net result of their efforts? Zero. Each would extract from the other the same amounts in subrogation. However, each would also pay for the entire machinery of its subrogation department, and each would suffer the expense of responding to, and defending against, the subrogation efforts of the other. So each would undergo the expense of a large bureaucracy that, in the end, produced absolutely nothing.
That, in net effect, is what is happening in the insurance industry in the United States today. Multiple policies are charging premiums calculated upon exposure for the same medical bills, and the claims on each of these policies are referred to a subrogation department where efforts are made to obtain reimbursement from some other policy, the issuer of which is, in its turn, handing the matter over too its own subrogation department. By and large, these multiple efforts work, in the end, to cancel each other out, leaving only the substantial cost of each of the subrogation departments.
You need to be in this sytem to realize how wildly inefficent it is. Whole law firms exist solely to pursue suborgation claims. There are people, many, many people, who do nothing but make phone calls all day long to identify and pursue subrogation claims, and that means that there are many, many people who have to answer those calls. There is likely no way to quantify the cost of these efforts, but it is safe to say that all of it is very expensive and, as is evident, all of it is, in the end, an utter waste of time and money.
In all modesty, I suggest a simple solution. First, we need to install a reasoned program of universal health care coverage. The details of its structure and funding are subject to rational debate, and politics will likely play a central role in shaping the details. The point is that the universal health care that we have is in dire need of revision on a rational basis. Universal health care is inevitable. Cost efficiency is possible only if we reconstruct the system along rational lines. My own preference is to run it like a utility. We all seem somehow to pay for water and electricity. So divide the country by a grid, and sell of the segments to the highest bidding provider or insurer. Give the highest bidder a monopoly in the areas they purchase, and put a public service vommission in place to control profits.
Then — outlaw subrogation. Remove medical expense as an item of recovery in all litigation. Since all medical expense is paid, it is not to be considered an item of loss. So, for instance, medical expense cannot be claimed as an element of award in personal injury claims, medical malpractice claims, products liability claims or premises liability claims. This should result in a drastic reduction in the cost of malpractice insurance for doctors and for products liability insurance for manufacturers. In worker’s compensation, it is estimated that about 60% of the moeny paid for work injuries goes for medical expense. Therefore, if subrogation is outlawed, all employers should experience a very substantial reduction in the cost of worker’s compensation insurance. Not only that, but the cost of running an insurance company should be greatly reduced, since the entire subrogation department would be eliminated. There would, in other words, be across-the-board savings to individuals, professionals and cocmpanies that would remove an appreciable part of their costs and make them more competitive in the global market.
There is likely some way to quantify the extent of savings that would be realized by eliminating subrogation, but at the very least it would reduce the country’s entire real cost of medical care by ten percent. If one accepts the estimate that medical expense in America is over a trillion dollars per year, that would mean a saving of one hundred billion dollars or more. This is a saving that is not just reasonable. It is dictated by reason, and, if we ran our country on the principles of reason, it would be easily done. Until we install something like a reasoned universal health plan, however, we will continue to carry this worthless and expensive burden.
We The Center 