All Things in Moderation

Thanks to the hard work of those who founded this blog and for those who insisted on inviting me. I have only scorn for those who failed to do either of the above, particularly those who failed to do the later.

There was a commentary in today’s Wall Street Journal discussing improving transparency in our health care system by publicly releasing data contained in insurance claims which is required under the ACA. The title of the article is More Transparency, Better Health Care but it is behind a pay wall (although I managed to get the full text as part of a “free pass”).

The commentary is quiet short and superficial, but it had a few interesting highlights that may be worthy of additional thought and discussion:

Rates of preventable diseases, hospitalizations, complications and readmissions vary greatly among health-care providers.

This sort of addresses something NoVa raised at the PL a while ago (although not exactly the same) in that there are often large regional variations in treatment regimens that lead to disparate spending and outcomes. Some of this is understandable as population differences will impact treatment differences, but it seems to me that there should be fewer differences than presently exist. The question, of course, is how do decrease those differences. I wonder what role competition plays here. Competition between health care providers may decrease cooperation and sharing knowledge but should also spur innovation (although under the present system there is less incentive to prevent disease or prevent readmission).

Too often, unnecessary, redundant and needlessly expensive tests and treatments are prescribed.

Well, now we’re just stating the obvious in a very unhelpful way. The reasons these treatments are prescribed vary widely.

Controlling costs without compromising quality will require multiple scalpels rather than one blunt instrument. Public reporting of performances measure could provide those scalpels by allowing the public to compare doctors and hospitals based on cost and clinical results.

Now we get to the crux of the commentary and to an issue raised by other PL contributors. Would a more informed public make better decisions with their health care dollars? The authors answer in the affirmative, but fail to provide any real explanation as to how or how much. I think it would be hard to argue that making the data available is a bad thing (assuming the data is accurate) but I am skeptical that it would make too much of a difference. We often don’t have time to comparison shop and even if we are afforded the time to do so, would we take the time to do so and would the time we spend shopping really be time well spent? Perhaps more importantly, as long as we still have the same health insurance system, won’t people just choose the person with the best “stats” regardless of costs? This seem particularly true when we consider that most health care dollars are spent at the end of life and often those treatment decisions are made by spouses and children who are both emotionally invested and, with respect to children, not impacted financially (inheritance aside) by how much a given treatment decision costs.

I wish the article had been more informative, but I do think it is good starting point for a conversation.

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Nancy: Well, if that’s your attitude, I think you should give me half the money and let me eat whatever I want and you can do what you want with your half. I think that’s the fair thing. 

David: The fair thing? The fair thing? I can’t believe it.  That’s it! I have been too controlled! What do you mean?  You took our nest egg and you broke all over the Desert Inn!

– Scene at the Hoover Dam from Lost In America, 1985

We hear a lot from President Obama, and the left in general, about the rich “paying their fair share” in taxes, the implication being, of course, that they don’t pay their “fair share”. But almost inevitably the charge comes without any serious consideration or offer of an actual objective measure of what fairness means. It is used simply as a populist cudgel to demonize the so-called rich. I think a true measure of “fairness” needs to be established in order to properly analyze whether this claim, that the “rich” aren’t paying their “fair share”, has any validity whatsoever. So what might such an objective measure be?


There has been one such measure offered recently, which is that people who earn an income from capital gains end up paying a lower rate of tax on their income than people who earn income from a salary. This, it is said (and seems at first glance) is objectively unfair. This particular measure is definitely worthy of consideration, and perhaps can be the subject of a future post. But for now I’d like to leave it aside, not only because of the complexity involved (one cannot talk about capital gains tax without also considering corporate taxation, nor the net effect of the progressivity and myriad of deductions allowed in the income tax), but also and primarily because I don’t think this is what people really mean when they speak of the rich not paying their “fair share”. If it were, then the claim would be used to bolster the notion only that capital gains tax should have the same structure and rates as the income tax, and it would be used against people making a certain kind of income, rather than being used to bolster the notion that rates should higher, and used against people making a certain amount of income.


And so, I would like to know by what objective standard can it be said that “the rich”, which I will define as those earning more than $250k per year, do not pay their fair share in taxes? When answering, please try to connect your answer to a) the share of taxes that this demographic actually does pay, and b) the services towards which taxes actually go.

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Hyper-politicized hiring at the Obama DOJ continues.–QB

Some within the bowels of News Corp are hatching yet another nefarious plot: A cable channel that shows only epsiodes of the Simpsons.

Some within News Corp. have floated the idea of a cable channel that shows only episodes of the “The Simpsons.” Such a concept however is several years off as “The Simpsons” is still on the air and there’s several syndication deals in place that would likely be invalidated.


The show has been running since 1989, and it’s approaching its 500th episode. With commercials, it’s estimated the series could be run back to back for almost eleven days without a repeat.

There’s a red-band trailer out there for The Thing. Which is a prequel to John Carpenter’s 1982 version, but it is also a beat-by-beat remake in many ways, according to sources. And it’s also called The Thing, just like the 1982 version. Which is confusing. And a red-band trailer, if you don’t know, means the trailer itself is rated R.

You could do worse than watch/listen to this interview of Ray Kurzweil on Leo Laporte’s Triangulation. Has anyone else here seen Transcendent Man?

Finally, there hasn’t been any Hobbit movie news in weeks. I’m suffering from withdrawal. Show me the Hobbit! — KW

Should anyone be surprised at law schools sexing up their applicant and student LSAT scores and GPAs? The market for new law grads has been crushed post-2008, yet law school applications rose, and law schools are scrambling for market position.–QB (wish I knew how to type a real hyphen!)

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Number 1:

I never understood why, in this day and age, a doctor writes a new prescription for 30 days. For example, about a third of the new meds MrJS is prescribed he takes for 7-10 days, finds they aren’t to his liking and stops taking them. Yes, in some cases takes longer for the meds to kick in, but frequently one can make an assessment in two weeks or less. The upshot is that Medicare Part D pays for 20-23 days of meds that won’t ever be used. For many of us it’s no biggie to get a 14-day trial scrip (when appropriate) and then have the doc call in a 30-day if the results are promising.

So I wonder how many Medicare Part D patients experience this and what it costs the taxpayer.

Number 2:

True story—A woman on Medicare eats bad take-out food and gets violently ill. At 3am she gives up being stoic and, on her doctor’s advice, heads to a local ER (not where her doctor works). She’s put on an IV drip, gets a jolt of anti-nausea meds and some morphine, and starts to feel better (who wouldn’t?). The nurses draw the requisite blood and urine samples and announce that the woman may have a UTI. Before the test results are even back, the hospital attempts to admit the woman for a UTI ‘with complications.’

Note that UTI’s are routinely treated with antibiotics and rarely require any hospital stay. Yes, if the patient doesn’t improve in 3-5 days the doc may want a follow-up visit, but hospitalizations at the outset are outlier events. Note also that the ‘complications’ have nothing to do with the UTI and appear to be responding well to treatment.

So how many women in this or a similar situation would go ahead and allow themselves to be unnecessarily admitted?

BTW, the above describes my life since I signed off last evening. And I’m at home.

Don’t get me wrong. I am glad Medicare exists. But wasteful stuff like this can’t be happening just to me.

Also, I promise to catch up on the other threads. I just needed to vent. Thanks everyone for carrying on so brilliantly.

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Any serious discussion of top tax rates should start with understanding top rates around the world.

http://en.wikipedia.org/wiki/Tax_rates_of_Europe
http://en.wikipedia.org/wiki/Tax_rates_around_the_world

I began this conversation on our first day with the suggestion that corporate tax rates peaked too high [39%] and too early, dropping off above $350K taxable income.  It has continued at times that I could not comment because life, as it were, interfered.  My corporate tax argument was based on both the irrationality of taxing small biz at a higher marginal rate than big biz, and at taxing it at a higher rate than our trade partners would.

The same argument applies to the personal tax.  There is some point where personal wealth would flee to invest in another nation where taxation was not as burdensome.
However, no matter how low taxes are in Albania, it will not go there.  We have experienced capital flight, so we know it does happen and we know what we are up against.  On the tax front, we probably need to worry only about western Europe, Japan, Canada, and Australia right now, but the field will expand, as other nations are viewed as safe, with protective judicial processes and as friendly to investment. Russia and China are out, for now.

So we can set our top personal tax rate at the low middle of our most similar competitors without fear of capital flight.

TMW, that would be the extent of my conservative argument here.  I suggest the following to you:

If the rate is not prohibitive, if it does not force capital flight to another country, then the highest such rate will not affect employment or decision making in a negative way.

Why?

1]  The tax is on net income only and does not affect pricing.  Net income is maximized for a competitive business at the same competitive price with or without the tax, although after tax profit is reduced across the board.

2]  The reduction of profit across the board could lead to less investment in a future year.  Again, as long as the worldwide comparison is favorable to us, we get more than our share of the future investment.  I would revisit this aspect if investment in America was stronger than in our trading partners, but we were all suffering from a shortage of private capital, that is, if an inordinate % of net income was replowed into expansion and R&D rather than sitting relatively idle.

3]  Think of high marginal tax rates [say, 40%] as high contributions from government for deductible expenses.  In other words, each new employee I hire when I am in the forty percent bracket is only 60% paid by me; each new Sec. 179 asset I buy is only paid 60% by me, etc.

TMW, I ask you to think about these points absent the bathtub theory that we can starve big government by removing its revenue stream.  About the Norquist theory: obviously, if the idea is to shrink the federal government across the board, that is one way to do it, in theory.  It has not worked in practice for reasons you and I have agreed upon before.  Both of our political parties are Free Lunchers.  They each want to be known to the voters as having supplied something for nothing.

A better plan for reigning in costs is a renewed Gramm-Rudman-Hollings statute.  At least it is better than arguing for tax cuts and wars at the same time.  It is also better than a constitutional amendment because were we to become fiscally responsible we would be balancing over a business cycle, not in both great years and bad years.  As it stands we only reached balance and surplus recently at the culmination of a boom in the late 90s.  Rather than either tax cuts or spending increases, we could have simply reduced the ND, knowing we might have to increase it in a bust.

Look at the world info and think of tax rates in that competitive light.  I suspect that will be an interesting exercise for each of you, whether you share your conclusions or not.

See y’all again rather late tonight, I fear.

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