Archive for July, 2009
Rule #4: There are always tradeoffs
This is especially true of consumer safety. It’s not good enough to say, “We must DO something!” about a problem — you have to be aware of the problems that something is creating.
For decades, California has been the only state in the nation to require the use of highly toxic fire-retardant chemicals on cribs, infant carriers, strollers, nursing pillows, changing tables, high chairs and other baby products.
Regulations mandating the treatment were well intentioned. Who wouldn’t want to protect children from fire?
But there is a complete lack of evidence that using the chemicals saves lives, and a growing body of research suggesting that exposure to fire retardants is dangerous.
Last year, the Consumer Product Safety Commission issued statements strongly discouraging the use of fire retardant in home furniture, including baby products. The federal agency’s scientists cited numerous studies linking fire retardant exposure to cancer, birth defects, reproductive problems, thyroid disorders, hyperactivity, learning disabilities and a plethora of other health concerns.
Making matters worse, California’s law has meant that baby products are often treated with the chemicals even in states that don’t require such treatment. To avoid manufacturing two separate lines, one for California and another for other states, many manufacturers make their products sold in other states to California standards.
During the 80′s, there were a series of sensational stories about kids’ cribs, toys and clothes bursting into flame at the slightest spark. I can remember ominous videos of pajamas being lit on fire by investigative reporters. This panic, of course, produced a needlessly hysterical response in — stop me if you’ve heard this before — California. They demanded that everything on Earth be slathered with fire-retarding chemicals. No one ever tried to evaluate what new risks were being incurred — kids were catching on fire! Anything is justified.
Oh, but it gets worse:
I got a cold chill as I read this article yesterday on the Metro crash investigation:
“In the aftermath of the crash on the Red Line between the Takoma and Fort Totten stations, Metro officials analyzed track circuit data and found that one circuit in the crash area intermittently lost its ability to detect a train. The circuit would report the presence of a train one moment, then a few seconds later the train would “disappear,” only to return again.”
It sounded to me like the same problems that have been encountered on the Space Shuttle, nuclear power plants, and various military systems. And that problem is tin whiskers.
The backstory: When people first started building electric circuits, they used tin metal to solder the interconnections between the copper bits. It wasn’t long before they noticed the tin would get “furry”, growing spiky whiskers as the part was used. These spikes could grow long enough to short out the circuits, and then were so weak that they would break off right after doing so. A smart metallurgist figured out that adding a small amount of lead to the tin alloy stopped this behavior. And so the electronics industry grew, and electronic circuits got so small and fast and reliable that they ended up in nearly every control system – with a bit of solder in every one of them.
In the early 2000’s two things happened: Europe passed legislation that prohibited lead in consumer products, and at the same time, the production of interconnection technologies went global. So even though only European markets mandated this change, producers all over the world had to comply. And that means that consumers all over the world were getting lead-free electronics, many times without knowing it. Many times the same part number started showing up with lead-free solder, making this trend very hard to track.
So yesterday, I dropped a note to one of my expert friends, who agreed with me that the circuitry in the Metro replacement part, more likely than not, contained lead-free solder. And then, he pointed out the likelihood that the latest Airbus crashes had lead-free solder components in their flight controls.
Environmentalists and consumer protection advocates always forget something: polluters do not pollute because they are evil and chemicals are not put into our products to poison us. These things are done for real reasons. Now sometimes those reasons aren’t worth it (lead, for example) and sometimes the bad stuff can be replaced with less bad stuff (um, lead, for example). But we always have to keep in mind what those evil substances were used for.
Kids are not putting electrical circuits in their mouths. Motherboards are not being dumped in rivers. The risk of using lead in solder is minimal. But the risk of not using solder appears to be catastrophic. That would suggest a pretty obvious course — except to politicians and environmentalists.
Just to be safe, I’m putting pictures of babies and puppies in my wallet.
That’s how much the Feds are paying to create a website. I’m sure there are a lot of loopholes to jump through for this kind of thing. But $18 million? Something sounds wrong — like the reporter has mis-stated what they’re being paid for.
I was once at an expensive restaurant in Atlanta that, I am convinced, was doing this.
Just in case you’re letting the OSA’s position on Honduras affect you’re thinking, check this out. Why is that right wing dictators are evil but left wing dictators are noble?
Have I said lately that I love cracked. Surely, I must have.
Too many stories to comment on:
I was there. We used to go every year to celebrate my grandfather’s birthday. Needless to say, we didn’t stay for the whole thing.
The Myth: Medicare is much more efficient than private sector insurance, spending only a fraction of what private companies do on administration.
Bad Policy Based on the Myth: A large justification for a single-payer system comes from this myth. Proponents argue that an efficient government system would squeeze the fat out of the system.
The Truth: This one should fail the smell test spectacularly. No one who is even vaguely familiar with the functioning of government would argue that it’s efficient. A priori assumptions are never a good basis for policy of course. But if your conclusions are so at variance with common sense and experience, you might want to double-check.
And indeed, we find that this is untrue.
First, Medicare does not administer Medicare. That job is outsourced to private insurance companies. This saves Medicare money directly — they get to use non-union private employees instead of unionized government employees. But it also saves them money indirectly — they do not have to invest money in infrastructure. They don’t have to build and maintain a vast sprawling organization all on their own.
Medicare also gets help from other agencies within the federal government. Including this would double the estimate of Medicare’s administrative costs (see link below).
Second, Medicare saves money because they have, arguably, too little administration. Decisions about what to pay for are handed down from the bureaucrats. I know — I’ve worked for years to get a hearing with an Administrative Law Judge on whether or not Medicare was going to pay for something. But if the Medicare rulers have decreed that something will or will not be paid for, there is usually no argument. And Medicare often cuts checks with little regard to whether those checks are going to actual services that have actually been rendered. If you’re an honest doctor, you get screwed by low Medicare fees. If you’re a crooked doctor, you can do fine.
But don’t believe me. I wouldn’t. Believe the CBO (PDF), which noted that Medicare has very few cost controls. Believe Obama, who has claimed Medicare is subject to $60 billion a year in fraud (a number I find unbelievable, frankly). Believe recent testimony that Medicare needs to increase the money spent on claims review by a factor of 10-20 to cut fraud.
Finally, Medicare has a very different task from private insurance companies. And that distorts the numbers.
Medicare patients are by definition elderly, disabled, or patients with end-stage renal disease, and as such have higher average patient care costs, so expressing administrative costs as a percentage of total costs gives a misleading picture of relative efficiency. Administrative costs are incurred primarily on a fixed or per-beneficiary basis; this approach spreads Medicare’s costs over a larger base of patient care cost.
Even if Medicare and private insurance had identical levels of administrative efficiency, Medicare would appear to be more efficient merely because of an artifact of the arithmetic of percentages–Medicare’s identical administrative costs per person would be divided by a larger number for patient care costs.
When administrative costs are compared on a per-person basis, the picture changes. In 2005, Medicare’s administrative costs were $509 per primary beneficiary, compared to private-sector administrative costs of $453. In the years from 2000 to 2005, Medicare’s administrative costs per beneficiary were consistently higher than that for private insurance, ranging from 5 to 48 percent higher, depending on the year (see Table 1). This is despite the fact that private-sector “administrative” costs include state health insurance premium taxes of up to 4 percent (averaging around 2 percent, depending on the state)–an expense from which Medicare is exempt–as well as the cost of non-claim health care expenses, such as disease management and on-call nurse consultation services.
In summary, Medicare is a program that does little more than cut big checks (although not big enough — if you’re an honest provider). Of course they can keep administrative costs down. I could keep costs down too if I didn’t care how much money I spent and had expensive customers.
But that’s not a model we can apply to the rest of the nation. It’s not even a model that’s being applied well to the elderly and infirm.
I’m no fan of insurance companies. But what we see in Medicare is even worse. We see a lumbering behemoth that has greater per patient administrative costs and more fraud and waste than the private sector. We see an agency that hides its administrative costs by piggy-backing on other agencies and private insurers. And, unlike private insurers, it doesn’t compete for customers, it doesn’t turn profits for investors and it doesn’t innovate to save money.
Why would you want more of that? For the simple reason that the supporters of government healthcare have already decided what they want. They don’t care about data — they care about socialized medicine. And whatever laughable distortions they have to create to make Medicare appear “efficient” are justified.
After all, it’s for the greater good, right?
You can argue for single-payer healthcare because you think people have a “right” to healthcare. I disagree — you can not have a right to someone else’s labor — but at least it’s an argument. You can argue for single-payer healthcare because you want greater equality — if we can’t all get heart transplants, no one should. I disagree — innovation has to start somewhere — but at least it’s an argument.
But you can not argue that socialized medicine is going to make healthcare more efficient. Because that’s just at variance with the facts.
One last note — there’s an undercurrent to the debate that distorts the nomenclature. Even if the private sector spends less money on administration than the public sector, I don’t think this would meet most single-payer supporters’ definition of “efficient”. Because what they mean by “efficient” is orderly. What they mean is controlled.
The free market is chaotic. Costs and benefits vary wildly from company to company. People get medical procedures without even checking with the politicians if it’s OK. Under a single-payer system, that all vanishes. We all have the same benefits, the same costs, the same size shoe. We are all told what to do and when and here. Great masses of humanity can move together at a single stroke of an executive pen. That vision of a uniform healthcare system is the basis for creating a health board that would review the effectiveness of healthcare treatments — to make sure no one is getting healthcare they don’t deserve.
So in that sense, perhaps Medicare is more efficient. But it’s not an efficiency I particularly care for.
Update: Paul Krugman attacked the study I reference above because it’s from the Heritage Foundation. The author responds and, in the process, humiliates the usually less hysterical Krugman.
Oh, Neal Boortz and the anti-immigration hysterics are going to hate this.Cities with high numbers of immigrants are safer than those without, including El Paso, which should be a violent cesspool. And I’m convinced that the causal arrow is pointed in the right direction since immigrants have a lower overall crime rate than “real” Americans.
Boy. Don’t you just hate it when facts get in the way. Stupid sexy facts.