Friday, October 26, 2012

The political class isn't smart enough to run health care

v  The political class isn’t smart enough even if they were good enough. Let us make the naïve assumption that everyone in the political class is altruistic. Assume they don’t romance about euthanasia, nor dream about population control. Let us assume that politicians are neither self-serving nor duplicitous, but instead they are noble. If the political class consisted of only those with the purest intentions, would they be able to manage the health care system? The answer is emphatically no! This critique was pioneered by the “Austrian School of Economics”.  Austrian economists dispute the government’s capability of controlling an economy because of the exponentially explosive amount of possibilities that bureaucratic wizards-of-smart have to consider. The free-market, meanwhile, discovers these answers automatically.v   

v  Proof of the wizard-of-smart failing:
Example: The Soviet Union relied on “cybernetics” applied computer science to provide information. The USSR’s pioneering computer scientist were heavily involved, include genius Nobel Prize winner Leonid Kantorovich. Kevin D. Williamson “The Politically Incorrect Guide to Socialism” p38
Example: The USSR was the largest producer of shoes in the world. “The USSR had three pairs of shoes for each citizen, but people had to wait to buy shoes. The problem was the available shoe did not reflect consumer’s taste: the shoes were made to fulfill a government plan.” James Dorn Cato scholar
Example: “The tale of Soviet-era production misalignment would be comical if they had not exacted such a high price in human blood. There would be huge surpluses of, say pesticides … but acute shortages of sugar, flour, shoes and other common items. Toilet paper was used as filler in sausage until toilet paper itself went into short supply.” Kevin D. Williamson “The Politically Incorrect Guide to Socialism”  p267
Example: America’s political class did everything it could to circumvent the free-market to increase home ownership. They gave home owners favorable tax status. They lowered interest rates. President Clinton’s Attorney General threatened to sue banks if they didn’t loan to those with bad credit. Community organizer Barack Obama and ACORN browbeat banks with protests that labeled them racists if they didn’t submit to giving loans out to risky recipients. Government-sponsored enterprises Fannie Mae and Freddie Mac gave banks an escape by buying up risky loans. Banks came up with their own solution by bundling mortgages and selling them to Wall Street. Wall Street bought the loans because they trusted that the loans were backed by the taxpayers because most of the loans were backed by the GSEs Freddie Mac and Fannie Mae. Wall Street was right. Thus the Wizards-of-Smart set in motion the house-building collapse, the current recession, the stock market collapse, and the Wall St./Fannie and Freddie bailouts which by some estimates cost more than we spent for World War II (adjusted for inflation!). , Mark Levin Liberty and Tryanny
v   they wanted demand to rise with rising prices rather than fall as prices went higher – which is to say they wanted magical pixies to plant unicorn trees and fertilize them with pixie dust.” .” Kevin D. Williamson “The Politically Incorrect Guide to Socialism”  p267 Using the same arrogant hubris, the wizards-of-smart command insurance companies use “community rating” for prices and force them to serve those with pre-existing conditions. This time they want prices to fall as demand increases.

v  Strangely, The federal government controls the amount of operating rooms there are.  Sec. 6001 PPACA (Consolidated) 62212y 100 PERCENT INCREASE LIMITATION   The Affordable Care Act has other similar limitations that include “procedure” rooms, giving power to the Secretary of Health and Human Services to grant exemptions. (and many other powers)

v  For sake of this exercise, we need to leave aside the likelihood that exemptions will be granted to the most lucrative campaign donors…to turf invaders like Walgreens and CVS’s clinics or turf defenders like the current hospitals. How does the Health and Human Service Secretary know the correct amount of procedure rooms? Will she use some new form of Cybernetics combining the Deep Blue Chess program and Jeopardy!’s Watson computer? Take Deep Blue for instance. Some have argued there are as many possible chess moves as there are atoms in the universe. Humans, who created chess, ipso facto, must be more complicated than chess. Even if that assertion is disputed, the human brain, its behavior, the human body and its health care is still extraordinarily complex. The complexity of human behavior is compounded exponentially by the fact that there are millions of us acting and reacting in real time simultaneously. Human health care is complicated, and predicting the appropriate amount of procedural rooms isn’t possible for a central brain in Health and Human Services. Get a bunch of brainiacs and brainiac wannabes, give them a super computer and they will still be at disadvantage over the market. For instance, will the young healthy formerly uninsured now start frequenting healthcare providers more often now that they must buy insurance? Will the fear of rationing cause elderly to schedule as many appointments as possible to get to the head of line should there be a problem? There will be pandemics, drug use spikes, health fads, population shifts that some mythical central brain must grasp. The market provides and army of thinking rational Kasparovs and Holts (tied Deep Blue, beat Watson) at every perspective.  Few are as smart as them, but they are likely as smart as the Health and Human Service Secretary. When a hospital or clinic decides how many rooms to have, for instance, they are blessed with on-hand perspective and possess honed skills for a specialized task. They are also blessed with institutional knowledge of past mistakes and triumphs.  And, they have money as instant feedback whether they made the right decision. 

 This is the calculus of consent: in the free-market a business gets 100% consent of 100% of its customers. Any other remuneration is because of fraud or politics or both, but that isn’t the “free-market.” With Democratic Socialism politicians receive consent of at least 51% of people who vote, which is always less than 51% of the people. Decisions to buy happen every second, but elections occur every two, four, or six years. The feed-back loop for business is direct and constant. The feed-back loop for politics is tenuous, diluted, and infrequent. Consent nearly vanishes with the purposeful quarantine of the Independent Payment Advisory Board, which under the Affordable Care Act decides reimbursement rates that can only be thwarted by a congressional super-majority. (Ironically installed with just a simple majority)
The ungraspable complexity of healthcare is proven by the ungraspable complexity ovf the bill. Key proponents of the Affordable Care Act admitted they didn’t read the bill, such as John Conyers and Max Baucus. I don’t think you want me to waste my time to read every page of the health care bill. You know why? It’s statutory language,” Baucus said.

No comments:

Post a Comment