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The ACA Delays Job Recovery

from Edward Lazear at the Wall Street Journal The Hidden Rot in the Jobs Numbers:

excerpt:

Although it is often overlooked, a key statistic for understanding the labor market is the length of the average workweek. Small changes in the average workweek imply large changes in total hours worked. The average workweek in the U.S. has fallen to 34.2 hours in February from 34.5 hours in September 2013, according to the Bureau of Labor Statistics. That decline, coupled with mediocre job creation, implies that the total hours of employment have decreased over the period.

Another possibility for the declining average workweek is the Affordable Care Act. That law induces businesses with fewer than 50 full-time employees—full-time defined as 30 hours per week—to keep the number of hours low to avoid having to provide health insurance. The jury is still out on this explanation, but research by Luis Garicano, Claire LeLarge and John Van Reenen (National Bureau of Economic Research, February 2013) has shown that laws that can be evaded by keeping firms small or hours low can have significant effects on employment.

HKO

To get a complete picture of the job market one must consider the unemployment rate, the percent of eligible workers employed and the number of hours worked. There are other factors such as underemployment and those that work off the grid to avoid taxes.

I believe the ACA is a great factor in this trend and predicted so in this blog on  Aug 23, 2010 here:

Employers with a large base of low wage employees will be hit the hardest, but their employees will suffer the most as many employers will find no other choice but to cut their hours to under 30 hours a week to avoid the burden on ‘full time’ workers.  Any business start-up requiring low wage employees will be thoroughly discouraged by their accounting and legal advisers.

Investment firms, accounting and legal offices, and firms with mostly higher wage employees will suffer very little and will avoid most of the burdens of this bill.

This bill is an abomination. It will hurt the lowest income the most and will delay any serious recovery in employment until it is repealed.

 

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No Place for Profits?

Doctor Leo Spaceman

Maryland’s ACA exchange paid $65 million to a contractor outside of the normal procurement process and it is deemed a huge failure.  While they are only at half of the goal of 77,600 enrolled by the end of the month only 20,000 of the 38,070 enrolled have actually made a premium payment. With a cost of $200 million that is about $10,000 per paid enrollee just for the cost of the exchange.

A Failed Exchange

Proponents of single payer centrally controlled health care often criticize the current system because of the inherent cost of the profit which they contend has no place in the health care market.  But to contend that profit serves the market for health care poorly while it serves the delivery of almost every other product and service well is to misunderstand the nature of profit and its function.

In a competitive world profits drive costs down. In the absence of profits there is little to control the costs that become the tool of political self-interests and enlightened elites.   If there is not room for profits in health care where is the room for obscene ineffective administrative bloat, and the damage to the health care market done by this arrogant and disastrous plan. Now a whole other level of expense is added to the cost of insurance and the cost of health care itself.

Moving economic decisions to a central authority does not remove the tough economic decisions; it just puts them in the hands of someone you do not get to choose.  It removes the consumer’s voice.

While Maryland may be worse than other state exchanges it does illustrate that exchanging profit for cronyism and elitist arrogance does not reduce cost and likely increases it while delivering an inferior product for most of the consumers.

There were and are problems in the health care market, and there are also big problems in the government controlled portion of this market.  The question is not whether the government or the market will make bigger or more frequent mistakes, but which one will correct mistakes and market dislocations quicker,  and which one will be held more accountable.

 

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Why Is This Bill (ACA) Different?

Doctor Leo Spaceman

From The Weekly Standard
A Slight Case of Bastardy
The curious and irregular conception of Obamacare
by Noemie Emery

Excerpts:

There are written rules that make an act legal, and unwritten ones that make it legitimate, and it is the latter ones this act fails. Medicare, Social Security, and the Civil Rights Act had four things in common that made them iconic: They embodied a popular consensus that was strong if not universal; they were passed by large margins with bipartisan backing, which meant their appeal crossed many factions; they were transparent and easy to follow, so the country and Congress could make informed judgments; and they were passed by the usual order of legislative business. The Affordable Care Act, on the contrary, was passed with public opinion running strongly against it; it was passed by the minimum number of votes in the House, with no Republicans voting for it; it was passed through the Senate via a loophole, as it could not have passed through normal procedures; and it was so complex, convoluted, and incomprehensible that its contents were a mystery both to the voters and the members who passed it, and remained so until last October, three and a half years after it passed.

Medicare and Social Security were relatively simple transfers of money, paid for with taxes and given to those deemed eligible for them by virtue of circumstance, and the civil rights laws were even more simple: They gave back rights to black citizens that had been taken from them by prior government and citizen actions. Obamacare, on the other hand, was a huge, complex bill of more than 2,000 pages that aimed to remake a vast, complex health insurance system, and created large numbers of winners and losers, in ways that few understood. Much of this ignorance was created on purpose, with the full rollout suspended for years, presumably until after Obama had been reelected and the furor surrounding its passage had wound down.

Medicare, Social Security, and the Civil Rights Act all passed by huge and bipartisan margins, with public opinion strongly in favor. Health care reform passed by 7 votes in the House, losing the votes of 34 Democrats (and all the Republicans), with a strong tide of public opinion running against it. Had there been a Senator Coakley, Republicans would have groaned, but accepted the bill as having been passed by the regular order of business. As it was, they loathed it almost as much for the way it was passed as for what was in it, and never accepted its moral authority. A Gallup poll taken on March 30, 2010, found that 53 percent of Americans considered the way the bill passed an “abuse of power” by Democrats as against 40 percent who found it “appropriate,” with 86 percent of Republicans and 58 percent of independents concurring in this negative judgment. Time has done nothing to soften these views.

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Nanny State Medicine

Doctor Leo Spaceman

From the Wall Street Journa; Victoria McEvoy writes Why ‘Metrics’ Overload is Bad Medicine.

Excerpts:

‘Quality” has been the buzzword in health care for a decade, but the worthy goal is driving health-care providers to distraction. All stakeholders—insurers, patients, hospital administrators and government watchdogs—are demanding metrics to ensure that money is spent wisely.

Metrics do matter: Pre-operation checklists, hand-washing mandates, length-of-stay goals for inpatient stays, and infection rates for patients with catheters have improved health care in a perceptible way. But holding physicians accountable for specific outcomes or measures of patient compliance ignores the complexity of managing a patient’s care. Metrics are chosen because they are measurable, not because they are proxies for excellence.

Primary-care providers like me are bearing the brunt of these often misguided efforts. As front-line providers responsible for a patient’s health, we have had every aspect of our professional lives invaded by the quality police. Each day we are provided with lists of patients whose metrics fall short of targeted goals.

Primary-care providers are forced to monitor innumerable other metrics, including hemoglobin A1Cs for diabetes, LDLs for high cholesterol, colonoscopy rates for patients over 50, emergency-room visits for all patients, eye exams for diabetics, flu shots and many others. Primary-care providers are swamped with lists, report cards and warnings about their performance.

Countless other personnel have been recruited in primary-care practices and hospitals to manage the metrics. While controlling health-care dollars is paramount, the financial toll for pursuing these measures is significant. Medicine is becoming a nanny state in which doctors must chase down patients because one metric is off.

HKO

Everything worth measuring cannot be measured and everything that is measured is not worth measuring.

Complicated factors, often involving the art of medicine and intuition, is sacrificed to measurements  just because they can be measured.  This may be largely due to the fact that medical practice is now directed by institutions rather than consumers.  Better quality medicine is more complicated than engineering a better quality car,  and is more a result of patience and thought rather than mere collections and applications of data.

 

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Dallas Buyers Club- A Libertarian Review

dallas-buyers-club-matthew-mcconaughey-jared-leto

While trapped in a wonderful room at the St. Regis in Atlanta during the snow storm the domestic goddess and I caught up on a few movies.  The surprise for me was The Dallas Buyers Club.

A homophobic redneck rodeo hound played by Mathew McConaughey gets HIV from a three way during a rodeo (an act that I immediately removed from my bucket list).  Given one month to live in 1985 he researches and finds better treatment from illegal sources from Mexico and other international sources.  He smuggles in massive amounts of drugs more effective than the “legal”  treatments they are restricted to and distributes to other infected cases.  In order to save his own life he has to break the FDA rules.  It leaves a strongly libertarian statement in the dramatic stories surrounding AIDS.  The character Ron Woodruff eventually dies but lived seven years longer than he was expected.

We are left with a tale of a man who has to fight his own government to get the medical treatment he and so many others desperately needs to survive.  He has to fight a government bureaucracy created and administered to protect him.  While the FDA has protected us from unsafe treatments, there is a downside to that government protection, and that is what this movie is really about.

The movie is based on a true story: The True Story Behind Dallas Buyers Club: Meet the Real Ron Woodruff

Mathew McConaughey lost over 50 pounds for this movie and is likely to win an Academy Award for it.  The transvestite drug abuser his homophobic character partners with is played by Jared Leto, a rock singer in 30 Seconds to Mars.  It was also an excellent performance.

Highly recommended.