Category Archives: economics

Medicare for All: The Possible Dream

Oh, “The Impossible Dream”. How were we to know that David Brooks, a true compassionate conservative torn asunder by the Trump led takeover of the Republican agenda, is a Luddite at heart?

New York Times columnist Brooks is one of my favorite writers. I never miss a column. And I never miss his Friday joint appearances with liberal syndicated writer Mark Shields on the PBS NewsHour. Brooks usually writes from a unique perspective, but his recent effort branding Medicare for All “The Impossible Dream” seems to have been written from the Twilight Zone.

The Blank Slate

“If America were a Blank Slate,” Brooks writes, “Medicare for all would be a plausible policy, but we are not a blank slate.” The problem, Brooks goes on to explain in detail, is that Medicare for all would require vast segments of America to “transition”, and that would, according to Brooks, be unacceptably disruptive.

The devil is in the details and in truth, as Brooks admits, we don’t know just what Medicare for all means or how we would plan to get there. He tends to cherry pick the proposals to focus on the most disruptive versions. But there is nothing in the history of this great nation to suggest that we will be unable to face whatever challenges the endeavor might raise.

A little history

In 1781 the thirteen American colonies, having taken up arms against their British masters and declared their independence from Great Britain in 1776, took pen to Tabula rasa and wrote the Articles of Confederation. In that document “the Delegates of the United States of America” set forth the rules to govern their joint enterprise and with that, a nation was born.

The British surrendered in 1783, and the United States struggled to reconcile the Articles of Confederation with the needs of the infant country. They couldn’t do it. Thank history they did not throw up their hands and declare the Articles must remain in force because it would be too disruptive to transition to something else.

That something else was the “Constitution for the United States of America”, written in 1787 and approved by enough states to put it in force in 1788. The nation has amended that document, in some very disruptive ways, in the years that have followed. These changes were often the result of change in the society, and sometimes the result of technological change which rendered provisions impractical or obsolete. Each time we “transitioned”.

Medicine is always changing

Medicine is especially adept at transition, a direct result of research and technological advance. We put the entire profession of “leech wrangling” out of business when physicians stopped using bloodletting as a treatment. We created an entire industry with the discovery of antibiotics and the development of pharmaceuticals. We forced medical practitioners to transition to an entirely new paradigm for surgical procedures when we required through regulation the use of sterile environments. Doctors, patients and insurance companies all had to transition in response to these advances, and we are the better for it.

Brooks chooses one of the most radical transition plans, that of Senator Bernie Sanders, to make his point. If instead you take Medicare for all to mean exactly what it says, it leaves room for private insurance to offer Medicare Advantage and Medicare Supplemental Plans, as well as Medicare Drug Plans. Companies can sponsor these plans as they do now to offer an attractive employee benefit.

Yes, the Mercatus Center Center study shows a tremendous increase in the amount of money which will flow through the federal government as a result of the transition to Medicare for all. But the study also says that the total cost will be somewhat less than the cost of the current system, where payments come from patients, employees and insurance companies. How did Brooks fail to mention that?

One of my best friends has just retired, selling the medical practice he co-founded nearly four decades ago.  He told me that even with Medicare paying less than private insurance for some procedures, the back-office cost of processing a claim, that is paperwork, telephone follow-up and appeals for the frequent denials of coverage, was 20-25% for a patient with private insurance and 2-3% for a patient covered by Medicare. With that amount of bureaucratic waste, plus the profits made by private insurers, the total cost of healthcare per person is likely to go down and the amount that is actually spent on medical services is likely to go up.

It is no surprise that, as reported by a Kaiser Family Foundation survey, if told “Medicare for all would eliminate private insurance and raise taxes only 37 percent of Americans support it….” The question is loaded. Try telling them that they would save more in health insurance premiums, co-pays and other healthcare costs than the amount of the tax increase. Try telling them they will, judging by the results in other countries, live longer, their children will be less likely to die of childhood disease and mothers will be less likely to die in childbirth. Now ask them if they are willing to make the transition.

Oh, Canada

One more point, this business about median wait time for an appointment. I have a Canadian friend who lives in Montreal and had hip pain. Her orthopedist had been watching it for years waiting for the point where a replacement was indicated. Finally, they decided the time was near and they put her on the waiting list for the surgery. It was a six months wait, which they had anticipated. One morning that same friend’s husband felt a sharp pain in his chest. He went to the emergency room and had triple bypass surgery that afternoon. Yes, there is a wait for elective surgery. But medical care is not compromised in a case of emergency.  My Canadian friends are very happy with the healthcare they have and wouldn’t trade it for the American system for anything.

This nation has been adjusting, and transitioning, since the day it was born. I’m sure it can handle this challenge. Although, if, as Brooks suggests, we went back and undid “that whole American Revolution thing,” we’d have the British healthcare system. On average they live longer than we do. And spend less money on healthcare while living it.

Financial Market Reporting, Part 9: Exchange Traded Funds

In my recent post on mutual funds, I noted that John Bogle disrupted that industry with Vanguard, a mutual fund company that specialized in low cost index funds designed to mimic rather than outperform major market indexes. The other mutual fund companies responded with their own index funds, and there is intense competition between them

Mutual fund shares vs. ETFs

Exchange Traded Funds, ETFs, are another refinement of the fund category. They will certainly figure into your reporting on the fund asset class because they are by some measures the most popular of all exchange traded securities.

For my primer on ETFs, see

Financial Market Reporting, Part 8: Mutual Funds and Index Funds

In a previous post about indexes, I identified the Dow Jones Industrial Average and the Standard and Poor’s 500 as the two most frequently referenced. They originated as short-cuts that summarized market trends, and are often used as a benchmark against which investment performance can be judged.

There has been an explosion in the number of indexes in recent years. There are hundreds if not thousands available, enough to slice and dice the markets in as many ways as can be imaged. Some are broad-based, like the NASDAQ Composite with more than 3,000 stocks. Others might track a region, like the EURO STOXX 50, based on 50 large companies in the Eurozone. Some follow companies of a certain size, like the Wilshire US Small Cap. And still others focus on an industry, such as the NYSE Arca (originally AMEX) Semiconductor Index.

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Trump and the Employment Report, fact and fiction, Pt. 2

Numbers are funny things. Even though they appear to be absolute, a clever manipulator can twist them to make pretty much any point he wants to make. Take President Trump’s statement from February: “Ninety-four million Americans are out of the labor force.” It might seem preposterous but it is correct, as the great sage Obi-Wan-Kenobi once said, “from a certain point of view.”

It is the number you get if you take the total U.S. population 16-years of age and older and subtract the people the BLS says are in the labor force. That number includes everyone who is retired, and most high-school, college, graduate or vocational school student. It also includes the disabled, homemakers, some self-employed and those living off their investments.

My guide to reporting the employment report continues at….

Trump and the Employment Report, fact and fiction, Pt. 1

The Bureau of Labor Statistics released its Employment Situation Report for February on March 10, showing a healthy 235,000 gain in payroll employment. Asked what President Trump thought about the numbers, White House press secretary Sean Spicer said, “I talked to the president prior to this, and he said to quote him very clearly,” Spicer said. “They may have been phony in the past, but it’s very real now.”

Many of the reporters present laughed. I cringed.

Over the years on public television’s Nightly Business Report, I filed countless “numbers” pieces. The monthly employment reports were most closely watched. For better or worse these reports often had an immediate financial market moving impact, making them lead stories for a market driven broadcast.

I cringed because I believe attempts to undermine the credibility of these reports do a great disservice.

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