Friday, February 26, 2010

Health Care Insurance and the Profit Motive

Rachel Maddow said, on her show a few nights ago (Feb 23-ish), that the real problem at the core of our health care crisis is that the system is set up in a way that pretty much ensures the problem will exist.

The progressives on the hill, and in the media/blogshpere, have basically demonized the health insurance industry and for seemingly good reason.  Insurers keep raising their rates, reducing the procedures and drugs they will pay for, and dropping people entirely when they get sick (and therefore expensive).  Each year we hear of obscenely high profits for these companies and the huge bonuses they pay themselves, and it is infuriating... especially to those who are sick, alone, hopeless, and afraid.

Rachel, a progressive if there ever was one, pointed out that we cannot blame a for-profit corporation for trying to maxmize its profits.  As a health-insurance provider of course they will prefer to keep rates as high as the market will bear, and to insure the healthiest (cheapest) people possible.  Maximize income, minimize expenses.  That's basic business.

Complaining about health insurance profits and cost-cutting measures reminds me of those people who insist on bringing wild animals into their homes as "pets", and then cry foul when one of them turns on a family member.  I grew up in rural Northern California where my father was the local fish and game warden.  It was (and is) illegal to keep deer as pets, but people do it, usually because they find an abandonned fawn.  Barely a year would go by before we'd hear another story of how the "cute fawn" that had grown into the family pet doe had, for no reason anyone could explain, attacked and killed one of the children.  A very tragic thing but let's face it: if you bring a wild animal into your home, you are foolish to expect it not to follow its own nature.

For-profit corporations are considered citizens in this country; they have rights, they pay taxes, etc... but they are not people.  They are collectives, and the people hired to run them have a clear and unequivocal fiduciary responsibilty to maximize profits and thus benefit their stockholders.  Those who do not are quickly gotten rid of.  If you have a 401K or a mutual fund, I guarantee the companies you own stock in are corporations you expect to generate a profit, and would vote the current leadership out of power if your stock value is consistently decreased.

It is, therefore, natural selection at work.  The corporate big-wigs who have remained in power are those who have generated maximum profits, and are therefore still in the job.  The "nice guys" who tried to look out for others failed to generate such profits, and thus are gone.

This can work.  An automobile company can only attract buyers if its cars are better and cheaper than the competition.  This pressure gets us, generally-speaking, better and cheaper cars.  Same for electronics, fast-food, tanning salons, etc...

The problem is that health care is different.  You do not control when you need it (you can decide not to replace your car this year; you canot decide not to have a health issue).  Also, the incentive for a car company is to sell you a car which they hope you will use (and wear out, and thus need another one).  The incentive for the health insurance industry is to sell you an insurance policy that they hope you will never use.

Cars, DVD players, hot tubs, vacations, tie-die neckties, etc... are nice things to have, but if we are not satisfied by the quality and the price we are offered we can elect to forego them.  You need health care and, given how expensive it is, you need insurance unless you are very wealthy.  If you don't like the price and the quality of what you are offered by the health insurance industry you have to buy it anyway.

  • The incentive of a car company is to figure out how to make a car you will find desireable at a price you will accept.
  • The incentive of a health insurance company is to sell you the most expensive policy, and then do the least for you.
This is nobody's evil intent here, it is inherent in the system. So... what do we do about it?  The only way to fix this is to change the system, and thus change the incentives and what they lead reasonable people within the system toward doing.

One way would be to remove the profit motive entirely (not from the health care providers, but from those that pay, the insurers).  "Single Payer" is often mistaken for socialized medicine, but it is not; it is eliminating for-profit health insurance, while maintaining a for-profit health care industry.  Replacing them both with government programs would be a "takeover" by the government, and nobody I know is seriously suggesting this.  Single payer is not on the table now, unfortunately, though it should have been... had it been explained properly, I think people would have supported it.

Think of it this way:  I think the proper job of the government is to do those things which we cannot reasonably do for ourselves, but must do collectively (I think it was Thomas Jefferson that said that originally).  National defense, protecting the environment, international treaties, things like that.  If we agree that most people cannot pay for their own health care when things get really bad, then this seems like such a thing.  We all pool some of our tax money, and when one of us gets seriously sick then this person draws on the fund.  It is, of course, what insurance is based upon... but a public fund would not be permitted to make a profit.  In fact, the accountability here would require managers to keep down costs while maximizing access to and the quality of care, or be replaced.  Pretty much the opposite of what we have now.

The other way, we are told, is to let market forces pressure the for-profit health insurers to lower rates and improve coverage.  Unfortunately this requires competition, and given that health insurance companies are exempted from anti-trust laws (believe it or not... they, and major league baseball are the only ones), then they can collude with each other so as not to compete.  They carve up the country into non-competitve business zones, and then charge whatever they want.  Of course they do, because they can, and this makes them more money (which is, again, what they are supposed to do)...

The proposed "public option" in health care reform is really just a way to re-insert competition into the system by giving people a government-run option to turn to if the for-profit industry refuses to act competitvely... but that looks to be circling the drain.  Thank the astro-turfing teabaggers for that one.  Of course, they were funded by the for-profit insurance industry, no suprise.

I am personally in favor of single payer, because I think health care is like clean water, something that we all need and that should not be a privilege.  That said, I think the conversation should be about how the system incentivizes the people who run it, and how we can create incentives that lead to the health care system we want.

What we have now will not do it.  We've invited a wild animal into our homes and are expecting it to act like a tame one.  This is fundamentaly foolish.  We must either increase the competition in the health care insurance business, in such a way that lowering our rates and improving the coverage makes them more money, or we need to eliminate the profit motive entirely.

What is being proposed now is "regulation".  It is probably the worst way to go; the only thing worse would be to do nothing at all.  Regulation depends on the wisdom of regulators to make rules that will force these for-profit corporations to forego profits... like trying to tame that wild deer by rapping its nose when it flashes its hooves.  This will be a constant struggle and will fail at times.  Given the inherent corruptability of regulators and the enormous sums of money involved in a large country, I don't see this as realistic... but again, better than nothing.

What I hope is that this is a step along the way toward real reform, but we'll see.

Tuesday, February 23, 2010

Heat, Part 2.

We need heat.

Heat makes us warm, produces energy and, oh by the way we make our food using energy and heat (trust me). If we can get ourselves a nice, constant, renewable, clean source of heat then the problems are all gone, and we can all just sing and dance ourselves into a stupor.

Really, if we didn't need oil... would we be in the middle east at all? Of course not. Its all sand, it's really hot, and figs are disgusting. It seems to me our quest for heat via oil has led to an awful lot of the horrors of the past, and present.  Like Iraq...

So, I left off last time with a question... what if there was a source of heat that was nearby, did not require consuming fuel, produced no waste, and would never end?

There is. Right here on earth. It's the earth.

The earth is actually quite hot. We don't think so, because we live on a very thin crust of skin that is quiet livable, but just under that crust the earth is really one big ball of hot. Every once it a while it reminds us of this by burning our faces off with a geyser or destroying the occasional Pompeii with a volcano, but most of the time we forget that this planet is smokin' hot inside.

This is not a new idea, of course. It's called geothermal energy and they've been using it in places like Iceland for a long time. Iceland, I guess, has a thinner crust. Lucky them. At least we don't have to eat Puffins.

But why are we not, like, totally focused on figuring out how to get and use geothermal heat? Dig holes down into the hot stuff, transfer the heat up to the surface, boil a liquid, and spin a turbine? No fuel, no waste, dig the hole wherever you want (maybe some places are easier, but the magma is everywhere).  We're talking steam technology, here, not magnetic bottles and cold fusion.

Okay, I don't know anything about this... but the experts can bring it on. It's farther down that you think, Scott. It's really hard to deal with those pressures, and transferring the heat is very tricky, Scott. We probably will need a whole new thermocouple technology, Scott. It'll cost way more than you think. It's really, really, really hard. You're an idiot, shut up, Scott.

I don't care. Really, I don't care. Whatever it takes to make it work, once it does we have free energy forever. Amortize any cost, any effort over "forever" and it's worth it.

Besides, do you mean to tell me that we split the atom in the 40's, flew to the friggin moon in the 60's, created plasma in the 90's, but here in the 21st century it's too hard to dig a really deep hole? I don't buy it. I think this is a failure of imagination.

Really, think about it. Let's say it takes some Manhattan-Project-Multiplied-By-The-Moon-Program type effort to do this... but once you do, the energy problem is solved. We can make all the electricity we want, forever (or as long as the Earth is hot inside, heh). Cars can run on it, trains can, we can festoon ourselves with pants made out of flat screen TV’s or whatever... and no pollution, no fighting over fuel sources. Nothing. Done.  (Okay, the earth's heat does pollute now and again, but even Al Gore can't blame humans for volcanos, and we get them anyway).

Ah, but the big bad corporations won't allow it, you say. They want to hold us by the short and curlies and make us buy their oil, rubbing their hands and cackling like Montgomery Burns, all that.

But... I thought we decided it was way hard, way expensive, to build a geothermal plant, right? Gonna take an Exxon-Mobile, or General Electric, or Mondo Corpromonstro corporation with deep, evil pockets to build it, right? Then, once they do, they are in the "sell electricity to all the suckers while paying for no fuel and no pollution" business. Who does not want to be in that business? Once you get it going, to get to own the richest corporation in the history of everything. Yeah, they'd hate that.

I understand why solar has failed.  They fear that we'll all put cheap plastic waffles on the tops of our houses, get off the grid, put them out of business and all turn into folk singers.  Fine.  I don't think we're about to build our own geothermal wells anytime soon.  The big corps get to keep control, just as they always have.

Sincerely, someone explain to me why this is not the answer, and please do so without pointing out how difficult it would be. We do difficult and expensive things all the time. I'll bet with just the cost of *one* of the countless wars we've fought and are fighting over oil, we could be lousy with GT plants. Someone tell me no, and why.

Heat, Part 1.

There has been a lot of arguing going on lately about whether or not we are messing up the climate by dumping greenhouse gasses into it. The argument goes sort of like this:
1: The climate is changing because of our actions, and we'd better do something about it.
2: No, the climate is changing because it always changes, always has. We cannot influence something as major as the weather.
1: But we are! Ice caps are melting, glaciers are receding, the ocean level is rising, the whole planet is warming in some places and cooling in others. We're shifting the balance, and it could be catastrophic.
2: Our data are too recent to know that, the sea level is not rising, and caps and glaciers are always cyclic. This is bad science done by bad scientists.
1: Do you really want to risk that? Ever since we've been burning fossil fuels the data have changed. Whole landscapes are changing. The pine beetles are wearing earmuffs. It's bad.

...and so on. Al Gore says this, Glenn Beck says that. I don't know. I don't think it's really the right question.

(Okay, maybe it is. Maybe we on the verge of a global cataclysm, and pretty soon the only people left will be John Cusack and Jake Gyllenhaal. If so, it probably does not matter what I write into my blog and whether you continue reading it, so let's assume the opposite)

So, here's the real question. What do we need?

We need food (so we don't starve), warmth (so we don't freeze in the winter), and energy (so we can run our machines that make for a civilization).

Food we'll leave aside for the moment.

Warmth is, well, warmth, but energy is also, when all is said and done, a matter of heat.

You move your car by expanding gasses that push pistons... heat. Electricity is generated by spinning turbines, which are spun mechanically. Heat. "But wait!" I hear you cry, "What about hydroelectric power, and wind turbines! Water and air don't seem so hot to me..."

True, but:

Hydroelectric power works because the water is pulled down by gravity. How did it get "up" in the first place? The sun evaporated it from the ocean, turned it into water vapor which cooled over the mountains and rained. It was heat that put the water up there, and without heat, you have no hydroelectric plants.

And the wind? The wind is moving air. Why does it move? Heat. The sun heats the air in one place, which rises, and air from other places rushes in to fill the void. The "rushing in" is the wind that moves our big pretty white propellers. No heat, no wind.

Nuclear power is heat. Fossil fuels are heat. The sun is heat. Heat is what we need.

(There may be a wonk out there or two who will point out that there is a non-heat alternative... tidal energy, caused by the moon's gravity, which can be used to turn propellers. Gravity is not heat... I guess not, I don't really understand gravity, but if anyone has a way of powering our civilization from the moon's gravity, I am willing to listen)

So, the real question, if what we need is heat how do we get it?

The answers fall into two categories: Use heat that is already there, or make it.

The sun is heat that is already there, and it does produce a lot of our energy. Heck, you could say that fossil fuels have their origin in plant matter that was made through photosynthesis, and thus all energy is solar, but that's probably a bit too arcane. The sun shines its heat upon us, costs us nothing, and produces no waste.

The problem with the sun is two-fold. First, the sun is really far away (93 million miles, on average), and therefore a lot of its heat is lost along the way. Also, half the time we are facing the other way 'round, so, you know, there's night to deal with. Maybe we could make it work anyway. I dunno. People argue over this one.

The other way to get heat it to make it, and here again we have two basic choices: Nuclear and Chemical energy.

Nuclear, today, is fission. Unfortunately it requires fuels that are dangerous and tend to get turned by self-important crazy-ass dictators into bombs, and it produces really nasty waste. What do we do with the waste? I guess we're going to put it all into a hollowed-out mountain in Nevada or something. Is that bad? Not for me, I live in Washington state. But, frankly, I'd like to think we can come up with something better than "stick it in a hollowed out mountain in a fairly ugly state". Also, sometimes the reactors melt down and kill many people at once.

Fusion... I don't know. Maybe, we'll see.  Sounds nice.

What's left is chemical energy, which basically means burning stuff.

The problem with burning stuff is that when you burn the stuff you don't have it anymore, and then you have burnt stuff to deal with.

Coal, gas, oil, these things will eventually run out. I know, I know, we have "vast reserves" of coal, and natural gas is everywhere, and as far as oil, well, drill baby drill!

"Vast" is not "infinite". We will run out, and long before we do these things will become scarce. When there is scarcity, people really tend to misbehave, invade each others' countries, blow themselves up, all manner of horrors. Scarcity is something we'd do best to avoid.

Also, we end up with burnt stuff... carbon dioxide, carbon monoxide, sulfur dioxide, I dunno, Baddy Maloxide, and we have to put it somewhere. Apparently it won't fit in a hollowed-out mountain, so we pump it into the air.

Is that a bad idea? Some say yes, it's going to destroy everything and some say no, Mother Nature can handle it. I really don't know if we can just poop into the air we breathe and everything will be fine, or if the whole of mankind will end up as John and Jake on Brokeback Mountain. It just seems that, if we could avoid it, we should.

So, it would seem we're screwed. The sun is too far away and is gone half the day, nuclear is a political mess and a dangerous source of radioactive yuck, and fossil fuels are finite, and messy, and might just destroy the plant though well, probably not, we're not sure, could be maybe.


What if there was a source of heat which, like the sun, consumed no fuel (okay, the sun is consuming fuel, but come on) and produced no waste but, unlike the sun, was close by and always available? What if it was safe, here, constant, would never (essentially) run out, and clean? We'd want that, right? Seems like the best of all worlds.

There is. Stay tuned. :)

Monday, February 8, 2010

Inbox Zero

For about the past year, I've been dealing with my incoming stream of email in a new way (at least for me).  I heard Andy Hunt ("The Pragmatic Programmer") talk about this at the IEEE conference last year, and I decided to try it.  It's called "inbox zero".

The idea is very simple.  Think about your postal mailbox at home... how many of you would go to the mailbox, take the contents out, look at them, open some of them, and put most of them back in again?  Not many, I would submit.  And yet, people do this same thing all the time with the "inbox" of their email system.

Andy asked how many people had over 100 emails in their inbox.  Just about every hand in the (rather large) room went up.  Then he said how about 200, 500, 1000... it was sobering how many people just left tons of email in their inbox.

Inbox zero basically says this:  my inbox is empty.  When I check it, I empty it.

The specific process to accomplish this is (and should be) different for different people, but here is mine.  Whan I open an email, I then do one of the following things to it:

1. Delete it (spam, or just "okay, see you then" messages).
2. Act on it, and delete it ("send me the file", or "call me" messages).
3. Foward it to someone else (delegate) and delete it.
4. Put it in my "to followup" folder for later action (big, important things).
5. Archive it (I use folders in Outlook or labels in Gmail).

What I *never* do is close it and leave it in the inbox.  Yeah, I do mean never.  The only email that will ever be in my inbox is email that I have not yet opened, and that's because I have not checked the inbox since it arrived.  When I check my inbox, I open every email and do one of those 5 things with it.

What is the point of this?

It's hard to explain, really.  Part of the value is stress reduction.  I think the idea of this big pile of email sitting there all the time creates a general feeling of "wow, I have a lot to do" and being overwhelmed by the notion of ever getting it all done.

Part of it is efficiency.  I deal with each email once, or if it's something substantive (placed into the followup folder) then I treat that as special.  Jokes I want to save, interesting links, stuff I want to prove later, I file away.  Gmail labels are better for this because a message can have more than one label (with Outlook folders, you have to decide "the" folder it belongs in).

But there's more to it than this.  Honestly, this has had a very positive effect on the way I think.  I'm more focused, more purposive, and I seem to remember things better.  Perhaps a cognitive scientest could explain the details, but my experience is that this yields far more than I ever expected, especially from such a simple thing.

Give it a try!  (BTW, if you're worried about "step one", just take your existing inbox and move everything into "old inbox", and start fresh.  That way you won't lose anything, and 99% of that "old inbox" folder is junk anyway).