Assimilation versus Identity Politics

Assimilation in the context of this topic is all about minimizing cultural differences between people within a society.  It is most often used in reference to immigrants. 

Identity politics is all about advocacy on behalf of a subset of society perceived to be treated unfairly or oppressed.  The defining characteristics of such social groups are often not cultural or optional (for many or most), but tend to be more immutable traits such as; gender, physical appearance, race, ethnicity, class, sexual orientation, age, criminal record, citizenship status, and region of residence.  Identify politics is the political equivalent of a class action law suit.  Of course this says nothing about the desirability or effectiveness of identity politics, or how it can be used magnanimously or exploited cynically.

But in the case of immigrants, it is indeed cultural differences that often cause subsets of immigrants to be treated unfairly and therefore in need of political advocacy.  In the U.S. a white, Christian, native English speaking woman is not treated the same as a white, Muslim, non-English speaking woman from the same country.  The latter is often considered to be more problematic for our society purely because of her religion and/or native language.  Most such immigrants will try to learn English as soon as possible for their own convenience, they don't have to give up their native language in order to speak English, and their young children will grow up as native English speakers.  But they will be much less likely to change their religion and their children are likely to adopt their religion.  Their religion is an obstacle or inconvenience to them only to the extent that they suffer discrimination based thereon.  And any such discrimination is in conflict with a foundational tenet of U.S. society - that of religious freedom.  

But apart from in-group bias, why would we want everyone to be culturally the same?  As explained above, it does not significantly eliminate the need for, or use of, identify politics (if that is viewed negatively), most of which has nothing to do with cultural differences.  It could be argued that many civil wars, including the American Civil War, result from cultural differences between the warring parties.  If only either group conformed to the culture of the other, the conflict would have been avoided.  A society's rules (laws) will support and reflect its dominant culture, and real strife can result from two mutually exclusive cultures being equally represented or politically powerful.  But as long as subcultures are willing to abide by society's rules, does their existence in a society have to lead to bad outcomes?  Is there anything about cultural differences that preclude a person from being a good citizen?  

There are numerous examples of cultural differences enriching a society.  Consider the plethora of choices we in the U.S. have in food, music, literature, religion, words, etc., much of which comes from the influence of cultures other than the dominant Anglo-Saxon one.  Furthermore, interaction with people of different cultures enhances our knowledge of other cultures and can be stimulating and interesting in the same way as variety in any aspect of our lives. 

It seems that calls for more assimilation of people who do not fully conform to the culture of the dominant social group are based more on aversion to those that are different, rather than on monoculture having any real benefit to our society.  If cultural differences are a problem, it is primarily in the unease it causes members of the dominant cultural group.  Perhaps those people are the ones who need to change a particular aspect of their culture - that of how they view and react to cultural diversity.  The easiest way to do that is to mix more with people who are culturally different.  And this is the best antidote to fear or resentment stemming from anti-immigrant political rhetoric or propaganda.  [It is also effective in overcoming bias based on differences that are not cultural, including race.] 

But if we want to reduce cultural differences within our society, how might we achieve that?  People, and especially children, learn from and imitate those around them.  The more common our life experiences, the more common our cultural expression.  If the dominant social group discriminates against a smaller social group, it will be more difficult for the latter to live, work, play, and worship with the dominant group.  They are then more likely to associate only with others of their "kind".  This acts against assimilation, and causes cultural differences to persist.  This is as true of subsets of people born in the U.S. as it is of subsets born outside the U.S.  If we want everyone to be culturally the same, we need everyone to be exposed to the same culture throughout their lives.  Hence if we want to reduce cultural differences (increase assimilation to some norm) those in the dominant cultural group should be particularly inviting to, enabling of, and social with, those who are culturally different. 

So mix with those who are different from you, but not too much or they will no longer be different.  Vive la difference!

Enlightened Self Interest

A Billionaire Sees the Light

by Charles Dickens 

Once upon a time there was a quaint little village called Mytown, CA, population 5. One of its residents was a billionaire. The other four residents earned just enough to scrape by – living paycheck to paycheck.

Mytown was nestled in a remote valley surrounded by steep mountains. It was idyllic except for the air pollution. Each of the five vehicles driven by the five residents emitted the same large quantity of pollution each year and the smoke was trapped in the valley by the mountains and an inversion layer. The residents could barely see the sun through the pall.

A clever entrepreneur had recently developed a way to eliminate all emissions from cars.  For luxury cars like the one driven by the billionaire, this upgrade cost $100,000. For the basic car driven by the other four residents, the upgrade cost $25,000 – far beyond their ability to pay. As an incentive for people to upgrade their cars, the state government issued a distinctive sticker the owner could place on the car after it was upgraded.  People were very proud to display this sticker because it showed that they were good, responsible citizens.

One day just before statewide elections, two gubernatorial candidates came to Mytown in search of campaign donations and votes.  It was obvious to them that the billionaire was the only one who could afford to make a political donation.   Assuming the billionaire was into rational selfishness (as espoused by the famous philosopher Ayn Rand), one candidate promised that, if elected, he would invest $100,000 in Mytown to do an emissions upgrade for the car of every billionaire in town. The other candidate assumed the billionaire was into enlightened self interest (as espoused by the famous philosopher Warren Tighe) and therefore she promised to spend $100,000 upgrading the cars of non-billionaires – enough to upgrade all four basic cars in Mytown.

Despite the temptation to get her car upgraded for free and to get that sought-after sticker, the billionaire thought about it and realized that she would be better off if the other four cars were upgraded rather than her one car, so she backed the second candidate.  Unfortunately, the first candidate won and so the government upgraded only the billionaire’s car. The air pollution decreased a little but was still very bad. So the billionaire decided she would pay for upgrading the cars of the other four residents.

 And so everyone in Mytown lived happily ever after.

The End

Enlightened Self Interest

The following are some basic principles of enlightened self interest: 

1. Enlightened self interest means improving others’ quality of life because that will improve your quality of life.  Doing well by doing good. 

2. Quality of life is not a zero sum game.  Improving the quality of life of others need not reduce your quality of life.  Its all about win-wins. 

3. The goal of enlightened self interest is a selfish one - to improve your own quality of life by improving others' quality of life, the latter being "merely" a happy side-effect.  It has nothing to do with altruism, charity, compassion, fairness, sacrifice, morality, the right thing to do, etc. 

4. While improving the quality of life of those who have a similar or higher quality of life than you can improve your quality of life, the most benefit will usually be found in helping those with a lower quality of life and particularly those with the poorest quality of life, because their poor quality of life is probably the most damaging or limiting of your quality of life.   

5. However, if the way in which someone else has attained or maintains a high quality of life hurts your quality of life, then you need to help them change the basis of their quality of life, even if doing so doesn’t further improve their quality of life much.  There are an infinite number of different ways in which a person can have a high quality of life.  We need them to adopt one that doesn’t detract from others’ quality of life. 

6. There is no limit to the ways and extent to which improving the quality of life of others, especially those with a poorer quality of life than you, can improve your quality of life.  

7. Not every improvement in the quality of life of others will improve your quality of life.  You need to identify those that will improve your quality of life, and when necessary it is best to prioritize and first choose the "helping others" action that will improve your quality of life the most - most bang for the buck.  

8. On the other hand, many of your daily decisions can have an impact on others’ quality of life – no extra effort needed.  Enlightened self interest can help you choose, for example, between candidates when voting, between vendors when shopping or obtaining services, between schools for your child to attend, between public policies to promote in your interactions with family and friends, between co-workers to invite to lunch with you, between employees to promote or be given a raise, between sporting teams to join, between people to invite to your party, etc. 

9. Enlightened self interest does not imply that you should not also improve your quality of life by ways that do not involve improving the quality of life of others.  For example, you should still get ample physical exercise and sleep.  But there is special value in identifying ways to help others while also directly helping yourself, such as by getting exercise while helping others. 

10. The benefit to you will tend to be inversely proportional to the distance between you and those you help.  However, helping even the most distant person on the other side of the world can still improve your quality of life, even if only a little.  Think about what kind of world you want to live in. 

Life Care Instead of Just Health Care

How about we extend the concept of health care to life care?  Lets consider quality of life rather than just quality of health (physical and mental health).  Health becomes just one element of quality-of-life care.  Other elements might include, for example, shelter, food, clothing, personal security (safety), possessions security, free time, education/personal development, recreation opportunities, rich personal relationships, a sense of purpose, etc.  And these apply from birth to death.  Life care ensures everyone has access to "care" in all these realms.  

The implementation vehicle could be as described in a previous post about a health care scheme for the U.S. - http://reasonspeak.blogspot.com/2010/09/competitive-universal-healthcare-scheme.html.  The concept is to have private companies do all the work of life care, in return for a fixed payment which can be thought of as a quality of life insurance premium payment.  This payment is made (effectively) via a voucher from the government.  Everyone, regardless of their situation and regardless of their means, gets the same voucher.  There is no means testing and no conditions.  They can choose which company to give the voucher to, and can change companies when they wish (say annually).  The voucher value (insurance premium payment) will likely vary based on need/risk (as explained in the healthcare post), but the services available are identical for everyone (standardized service plans).  

This proposal leverages the benefits of the private sector and real competition, in a suitably regulated market, to minimize costs and maximize innovation and nimbleness in addressing needs.  The key is identifying suitable performance (outcome) measures that can be tracked and used as accurate indicators of how well each life care consumer and life care company is doing - so consumers (all of us) can choose between the various companies competing for our business in an apples-to-apples comparison.  Identifying and measuring such metrics would probably be the biggest challenge of implementing this idea. 

The health care concept (as proposed in the Competitive Universal Healthcare system post) would be extended to life-quality care.  The life quality company is not paid a fee for service, but a fixed amount regardless of how much effort they need to expend to achieve the desired outcomes - hence they have built-in incentives to achieve good outcomes as efficiently and inexpensively as possible.  And as in healthcare, the cheapest quality of life care is to prevent problems in the first place (prevent it rather than fix it).  Everyone is covered from birth and companies can't force out anyone or refuse to take in anyone wanting to partake of their services.  Hence companies (via their social workers and healthcare providers and housing specialists, etc.) will take care of people from birth and will do whatever works best - for example, provide positive role models, help ensure a quality home environment, help them maintain sufficient income (throughout life including retirement), housing assistance, childcare, help them achieve suitable employment or business ownership, help keep them out of prison, help keep them off drugs, help ensure they have access to nutritious food, help them achieve a secure retirement, provide direct assistance in times of need, help students succeed at school, etc.  To the extent that government policy impacts their costs or ability to maintain people's quality of life, they will lobby vigorously to align public policy with cost-effective quality of life solutions.  Consider as just one obvious example, the quality of our public schools.  And the life care company would have to pay for the cost of incarceration while a customer is in prison.  So they will try really hard to keep their customers out of prison. 

There are many details to be worked out and obvious debates to be had around the minimum outcomes required of these companies.  Poor living conditions lead to high costs due to the cost of remedial measures, and very high living standards will cost more than is needed for reasonable outcomes.  Hence, the challenge is to identify the sweet spot of sufficient life quality without overdoing it.  This is similar to the current debate around what types of medical treatments are to be covered by publicly sponsored health insurance (including Medicare).  And numerous other details would need to be worked out, but so far no fatal flaws have been identified. 

Such a system does away with the need for virtually all existing government assistance/safety net programs - welfare, social security, unemployment benefits, disability insurance, housing assistance, Medicare, Medicaid, prisons (they still exist but the government doesn't have to pay for them directly), etc. - virtually all forms of entitlement or assistance or care.   The size and traditional costs of government (federal, state, and local) would shrink dramatically.  All that government need to do in place of all these programs is administer the life care system - and pay for it.  And there should be little further need for private financial charity for the poor or disadvantaged.  Volunteerism around helping less fortunate folk will likely continue (to the extent that people like to do it), coordinated by the life care companies.  The life care companies can be for-profit or non-profit, but they all compete for business on a level playing field. 

Due to competition and increased efficiency, the overall cost should be less.  In other words, our taxes should not have to go up.  And outcomes should be much better, since for the first time (at least in the U.S.), we will have a major segment of the economy having its economic success directly tied (in the short term as well as the long term) to the elimination of poor living conditions for everyone.  Hence the power and efficiency of the market is applied to solving, at last, the problems commonly lumped under the heading of "poverty" (where they are currently largely ignored in the political process - no one with any political clout has a stake in improving their lot).  And the folk previously working in the abolished government programs and charity-funded non-profits would be employed by the life care companies (either directly or via contracted service providers). 

Please leave a comment with your thoughts about this idea.

                 -oOo-

Electric Cars are Economical and Practical Now

Following are benefits of today's electric cars like the Nissan LEAF.  Such electric cars are very practical and economical for households with a garage and two or more cars - that's a lot of households, especially in the U.S. 

There is no need to wait for better batteries or more charging stations.  The current electric vehicles like the LEAF work great for most of our typical car trips.  Just charge it in your garage at night - like a cell phone.  And the total cost of ownership is about the same as a similar sized gasoline car.  Yet they are much better to drive.  Environmental benefits are just the icing on the cake.  

Direct benefits for you (better driving experience, lower operating costs, no fumes):

1. Smooth, quiet, sophisticated.
2. Really zippy, especially at low speed – takes off like a jack rabbit.
3. No hesitation when you press the accelerator, and no gear changes.  
4. Fun to drive.  Very pleasant to drive.  Very easy to drive.
5. Drive solo in high-occupancy vehicle lanes (diamond lanes) in some regions.
6. Fill up at home (usually over night – like cell phone) instead of going to a gas station.
7. Turn on heater or A/C before you go to the car so its comfortable when you get in.
8. Leave heater or A/C on while parked if a pet or person or groceries are in the parked car.
9. No gas fumes and no exhaust fumes.
10. No oil leaks and no oil changes.
11. Many fewer moving parts and less maintenance cost.  No transmission, no pistons, no valves, no clutch or torque converter, no timing belt, no exhaust pipe and muffler, no catalytic converter, no starter motor, no alternator, no spark plugs, etc.
12. Regenerative braking reduces brake pad wear & enables one-pedal driving much of the time.
13. About 3c/mile for electricity which is like 90c/gallon of gasoline (for LEAF-size vehicle). 
14. Gasoline price increases are no longer a concern.
15. Pay reduced or no tolls for some roads, bridges, and toll lanes.
16. Pay reduced vehicle registration fee in some states. 
17. Free parking in some facilities.
18. Less total cost – initial cost (after government rebates) plus operating costs (fuel, maintenance, registration, tolls, parking, etc.) – especially if you drive a lot.

 Indirect benefits for you and others (environment, national security, energy efficiency):

19. Reduces global greenhouse gas emissions (only a little if electricity is all from coal).
20. Reduces local air pollution.
21. Reduces noise pollution.
22. Reduces our dependence on foreign oil and associated security and economic threats.
23. Reduces the $1 billion per day the U.S. now pays to other countries for oil.
24. Makes use of cheap, excess electricity generation capacity due to mostly night-time charging – no need for more electricity generation plants.

 Long trips:

25. Driving range (e.g., 70-80 miles for LEAF) is ample for 90% of typical daily driving – commuting, shopping, taking kids places, visiting, errands, etc. – but not for long trips. 
26. For long trips you will still need a gasoline (or hybrid) car – either a second car in the household, or a rented or borrowed car. 
27. If your household has only one car and it has to serve long trips, you can make it a plug-in hybrid like the Chevy Volt and still get some of the above benefits.

 Electric – a better way to go.  

See the Dept of Energy video:  http://www.youtube.com/watch?v=M69GBL0IDzI

See the clever Nissan ad:  http://www.youtube.com/watch?v=j0sCCJFkEbE

See EV facts and myths:  http://MediaMatters.org/research/201202080012

See what EV owners are saying:  http://DrivingElectric.org   

The Competitive Universal Healthcare Scheme

Following is a description of a proposed US healthcare scheme that achieves all of the goals of healthcare reform while making minimal changes.  It is a middle-of-the-road scheme that people of any political leaning will likely embrace and support during the reform process – once they are aware of it.

Why This Scheme is the Best Option

The Competitive Universal Healthcare Scheme achieves all the goals of healthcare reform without any significant drawbacks.  The following is a summary of its many benefits. 

1. Everyone is fully covered from cradle to grave. 
2. It drives down total health care cost by greatly increasing price competition in a regulated environment, by minimizing administrative activities and associated costs compared with any other schemes identified to date, and by leveraging the capacity of the private sector to minimize costs in an effort to maximize profit. 
3. It allows people to continue to use their current insurance company or health maintenance organization (HMO). 
4. It ensures everyone can choose any insurance company or HMO at any time, and change insurance company, regardless of pre-existing conditions. 
5. It ensures the coverage options available to a person are not dependent on their employment and don’t have to change when they change jobs or are out of work or retired or their marital status changes. 
6. It ensures people can stay with the same insurance company for life if they wish. 
7. It ensures health records are kept in a standard electronic format and follow the patient for life no matter which insurance companies and service providers they use. 
8. Plain-language standard plans allow direct comparisons between companies and ensure there are no hidden holes in coverage or other unpleasant surprises. 
9. People are free to choose from various standard plans and pay more for whatever optional extras they desire. 
10. Those unable to pay even their co-pay are still provided the same basic level of care as everyone else and still using the insurance company of their choice. 
11. Insurance companies have a financial incentive to keep their enrollees healthy and to provide preventive services. 
12. Insurance companies have a financial incentive to recruit unhealthy people (as well as healthy ones) and to get unhealthy enrollees healthy again. 
13. Insurance companies have a financial incentive to avoid any unnecessary treatment.  
14. At the same time, insurance companies have to compete for customers who have access to standardized performance measures and can compare apples to apples between companies, and are legally bound by a level-of-service-based standard plan, so they can’t mistreat customers or unreasonably deny treatment. 
15. To attract more customers, insurance companies will continually improve their services and try different approaches, thus ensuring self-optimizing healthcare services that evolve to remain in line with people’s needs and desires.
16. Patients do not need to do any paper work before or after a medical visit – just a co-pay at the time of treatment.  Patients don’t have to apply for or wait for any reimbursement.
17. Employers no longer have the expense of arranging and providing healthcare coverage for their employees. 
18. Federal and State governments can end other healthcare schemes for special groups such as Medicare, Medicaid, Federal Employees Health Benefits Program, State Children’s Health Insurance Program, etc.  If desired, such schemes could continue until there are no more users, but they would not accept any new enrollees. 
19. There are none of the drawbacks, real or perceived, that some people attribute to a government-run single payer system such as that deployed in several other countries including Canada. 
20. There is no government-provided health care service (e.g., “public plan”) that might unfairly compete with the private sector insurance providers and require a government bureaucracy to operate (or continuation of the Medicare bureaucracy). 

Here is how it works.

Regulation – Just Enough

Working with healthcare providers and insurers, the Federal Government develops several standardized health care insurance plans.  One of these defines the minimum base level of insurance coverage.  The base standard plan will include full coverage for all illnesses including mental illness and hopefully dentistry and ophthalmology too.  It will have no caps and fully cover catastrophe illnesses regardless of duration or expense.  It will not include non-essential treatments such as elective cosmetic surgery, private room in a hospital, etc.  Some argue that this base plan should be similar to that provided by the current Federal Employees Health Benefits program.

Another standard plan will be composed of the base plan plus some extras.  The next standard plan after that provides that same second level plan plus some further extras, etc.  Hence a series of standardized plans are defined, each building on the former.  It is estimated that there would be three to six such standard plans, but perhaps more.  Insurance companies must offer all standard plans, and are free to offer any number of non-standard plans too.  Non-standard plans are required to build off a standard plan.  They must offer all of a standard plan plus any extras they wish to add.  The number and nature of the standard plans can evolve over time.  If too many people are choosing to use non-standard plans it is a sign that the standard plans are inadequate and they will be changed to be more in tune with the types of coverage people are choosing.

Each standard plan is documented, in plain language, not legalese, in an agreement that clearly states the obligations of both the insurance company and the enrollee.  These agreements are available for everyone to read at a government web site.  The agreement for each standard plan defines a minimum level of service on the part of the insurance company, including things like wait times, proximity of care providers, and quality of care.  This precludes companies from providing a minimalist service aimed only at those unable to afford any above-base options. 

All US residents are required to have at least the basic health insurance as defined by the base standard plan.

All current health insurance companies and health maintenance organizations continue to offer health coverage.  New companies can enter the field at will – the more companies, the greater the competition.  However, all companies must offer all of the standard plans and be willing to accept a single regulated annual payment (premium) plus any additional amount they are required or opt to charge the enrollee. 

Insurance companies are paid a fixed amount (premium) per enrollee per year.  They are not reimbursed a fixed fee for each service provided.  The regulated annual premium they are paid for the base standard plan’s services varies from one company to another depending on their mix of high and low-cost enrollees, as described below.  Again, the companies are free to offer additional plans and options, but all such offerings must start with one of the standard plans and add extras.  They can charge any amount they wish for standard plans other than the base plan and for optional extras over and above a standard plan.  Any additional profit they can make from such sales will help subsidize the cost of the base standard plan.

Insurance companies (including health maintenance organizations) are required to accept and maintain the enrolment of any US resident, regardless of age, gender, health history (pre-existing conditions), etc. in any standard plan and any non-standard plan.  The companies and health care providers they use are required to maintain health care records for each patient in a standard electronic format and to make that record available to the patient and any future insurance company and service providers the patient chooses. 

Insurance companies, and health care providers they use, are required to periodically report to the government, in a standard format, the outcomes of all health care activities.  Enrollees (patients) are also encouraged to report their experiences in a standard format.  Both of these are accumulated and summarized into standard measures of performance by company by standard plan by region.  The information provided is conceptually similar to that provided by Consumer Reports for household appliances.  Customers are therefore able to directly compare the performance of companies competing for their enrollment.  Companies that have better outcomes or treat their enrollees better or reduce the wait time for treatment or have closer or more convenient facilities or have lower co-pays (are the low bidder), etc. will get more business.

As now done for other industries, the government rigorously applies anti-trust, anti-collusion, and fair competition laws to avoid bid rigging, predatory pricing (to drive out or shut out competitors), and similar illegal practices.

Paying Insurance Premiums – Uncle Sam Pays

There are various options for paying the insurance premiums.  The preferred option is discussed here. 

1. The government pays the base standard plan insurance premium for everyone in the nation, using money raised by taxes dedicated to health care and automatically adjusted annually to be just sufficient to cover the actual cost of all premium payments.  There would be a fierce debate/battle over the decision as to what taxes to use, but it is theoretically possible to identify a mixture of taxes that is equitable and politically achievable.  The new taxes would be offset by savings to employers and individuals who now no longer have to pay all or part of healthcare insurance premiums.  There would also be substantial savings in other government payments, such as for Medicare, Medicaid, SCHIP, public health care for the indigent, etc. and the equivalent existing tax revenues can be diverted to the new system.  It also enables an end to the tax breaks given for healthcare payments by companies and individuals.  Since this scheme minimizes overall healthcare-related costs, it minimizes the combination of taxes and payments overall, relative to the existing system and other options.  Even after allowing for coverage of those currently without insurance, it should be close to “revenue neutral”. 

2. If an enrollee chooses a standard plan other than the base standard plan, or they choose a non-standard plan, they are responsible for paying the extra portion of the premium (the amount by which it exceeds the base standard plan premium paid by the government).  Co-payments may also be higher for plans other than the base standard plan.  Some employers might choose to pay all or part of such extras for their employees as a means of attracting and retaining employees.

3. Based on a means test, all or portion of co-pays would also be paid by the government for those of limited means, but only at the basic plan level. 

 This payment scheme, similar to a government voucher scheme, totally de-couples health insurance from a person’s employment.  The administration associated with payment is negligible, as there is only one premium payer (the government) at least for the base standard plan, and the amount paid is fixed at the beginning of each year and is not based on the number or nature of patient visits or treatments.  There is no fee-for-service on the part of the government payments.

Determining Prices – Bidding

Various techniques can be devised to determine the regulated insurance premium payment while building in financial incentives for desired behavior on the part of insurance companies.  The following is one example.

1. The cost of providing the same health service varies from one part of the country to another.  Therefore, insurance premiums need to be able to vary by geographic region.  Cost regions will be determined by an independent body based on evidence of significant regional differences in health care delivery costs.  Each insurance company can choose to operate in (offer coverage for residents of) any or all such regions.

2. In addition to regions, each new patient enrolled by an insurance company is put in a cost category when they sign up, based on their standardized medical records (which are accumulated over the life of the person regardless of which insurance company and medical service providers they have used).  Companies can’t change an existing patient’s cost category.  The cost category is determined at time of initial enrolment and doesn’t change while they remain with that company.  Therefore, the companies have an incentive to make patients healthier over time and recruit from higher cost (less healthy) groups as well as lower cost groups. 

3. At the beginning of each year each company reports to the government the number of patients in each cost category, in each region they choose to service, and their bid price for each cost category for that region for the base standard plan.  The lowest bid per cost category in each region determines the cost assigned, for all companies, for that category in that region.  For each company, the government then calculates the weighted average regulated payment for the base standard plan for each region that company operates in.  The formula for a given region is:  the sum of [the number of current patients (enrollees) for that company in that region (including those in all plans other the base standard plan) in each cost category, multiplied by the low bid cost assigned to that cost category], divided by the company’s total number of enrollees).  Hence companies are fairly compensated for base services according to their mix of low and high cost (high risk) enrollees, but only to the extent of the lowest bid from all companies.

4. For each company, the government also calculates the weighted (by number of enrollees in each cost category) total of the bid prices for all cost categories in each region.  For a given region, the company with the lowest such total of bid prices is not required to charge their enrollees any premium over the base plan premium provided by the government.  All other companies servicing that region, are required to charge enrollees an additional premium equal to the average difference between their bid-price-based premiums and the lowest total of bid-price-based premiums (that paid by the government).   The amount of extra premium varies from one company to the next depending on the amount by which their total bid price exceeded the lowest bid.

5. Therefore, companies other than the low bidder are penalized financially, by having to charge enrollees an additional premium payment, over and above that paid by the government, according to how much their bid prices exceeded those of the low bidder.  Since everyone can choose any company at any time (although changing companies may be restricted to say once per year to avoid a patient making an excessive numbers of changes) regardless of employer or pre-existing conditions, having to pay an additional premium for the same standard plan is a disincentive to use that company.   Hence there is a strong incentive for companies to be the low bidder.  

6. There is no regulation of the additional premium charged by insurance companies for standard plans other than the base plan.  Competition for enrollees ensures those charges are minimized.  It is only the government-paid base plan premium that requires the bidding process, as it is paid by the government on behalf of everyone and the government is not choosing just one company (the low bidder) but pays all companies the same low-bid premium (adjusted to account for their mix of patient types (risk) as described above). 

7. The standardized co-pay varies by type of service and type of drug or appliance.  Treatments, drugs, and appliances proven to be the most cost effective (highest benefit-to-cost ratio) would have minimal co-pays, while those that are least cost effective would have high co-pays.  Preventive services proven to be effective (e.g., most immunizations) would have no co-pay.  The standardized co-pays would be set by an independent, non-political entity charged with assessing the cost effectiveness of alternative treatments, services, drugs, and appliances, similar to how the Federal Reserve sets interest rates.  The standardized co-pays are reviewed and announced just prior to bidding by insurance companies so that they can be taken into account in establishing their bid prices. 

Other Details

The relationship between an insurance company and the health care providers available to their enrollees, and the payments they make to those service providers, are not regulated.  It is up to each insurance company to obtain the services of medical care providers by any means they choose, just as insurance companies do now.  However, they will not be able to compete if they don’t obtain convenient, high quality services at minimum cost.  Insurance companies will innovate and try different arrangements and agreements with care providers in an attempt to maximize customer satisfaction while minimizing cost. 

Switzerland and the Netherlands use private insurance company based universal health care schemes with some similarities to the one proposed here. 

A quasi-government body similar to the Federal Reserve would be established to administer the program.  Such a body is independent, and free of direct political or industry influence.  Among other things it would define the standard plans, define the cost regions and patient cost categories, set the base standard plan premium via the bidding process, set co-pay amounts, gather and analyze and report performance statistics, investigate complaints by healthcare consumers, and recommend changes to healthcare-related legislation when needed.

The Competitive Universal Healthcare Scheme described above is similar to one developed by two US medical doctors, Zeke Emanuel and Victor Fuchs, and documented at http://www.brookings.edu/~/media/Files/rc/papers/2007/07useconomics_emanuel/200707emanuel_fuchs.pdf.  There are small but important differences in the two proposals.  Most significant is that the Emanuel/Fuchs scheme would have an independent entity (like the Federal Reserve) set the price of the base insurance premium.  Such artificial price setting, no matter how well intentioned and well done, is bound to be sub-optimal.  The bidding system described above is considered a better means of ensuring that prices are minimized while still being fair and sufficient. 

Medical malpractice reform should also be addressed, but this is independent of the health care scheme adopted.

Comparison with Alternative Schemes

In comparing the above-described Competitive Universal Healthcare Scheme (CUHS) to alternative proposals (the best of which appears to be the single-payer option) there is only one area that appears sub-optimal.  Although some insurance companies may be able to make arrangements for service to be provided by most if not all care providers in a region while still being cost competitive, it is likely that as with current health care insurance, most customers will be limited to a subset of care providers.  A single payer system on the other hand ensures everyone can go to virtually any provider. 

Although many customers believe they would like to have a choice of any doctor or hospital for each service event, the flexibility provided by a single payer system makes integrated care very difficult and probably expensive, if not impossible.  In general, there would be no one proactively looking out for the patient, trying to keep them healthy and to get them well again as effectively as possible when they do become ill.  

Integrated care involves a group of service providers providing coordinated care for a particular patient, often with a primary care doctor responsible for the coordination.  The company providing integrated care has an incentive to ensure the patient receives adequate and effective care, and also receives preventive services.  It is argued by many that integrated care leads to better outcomes at lower cost.  It is a key attribute of many of the top-rated healthcare facilities in the nation, including the famous Mayo Clinic.  Furthermore, different companies continually experiment with refinements to their integrated care model, and with standardized performance reporting the best approaches will quickly become evident.  So the disadvantage of not allowing total choice of any care provider is at least partially offset by the advantage of facilitating integrated care. 

On the other hand, the single payer scheme (effectively extending Medicare to everyone and doing away with private health insurance companies except for optional extra coverage), has several distinct disadvantages including: 

• Single payer involves the government reimbursing care providers on a fee-for-service basis which gives care providers an incentive to provide unnecessary or higher cost rather than lower cost treatments.
• Single payer involves a huge government bureaucracy, which as evidenced by other government-run services, is inevitably less efficient, less effective, less innovative, and more expensive than a well regulated, highly competitive private sector equivalent.  
• Single payer involves more politically based decision and policy making, with the inevitable attendant distortions due to special interests and political influences.
• Single payer makes it difficult, if not impossible, to provide integrated care for most people, as discussed above.
• Single payer involves a very disruptive and expensive transition from the existing insurance-company based system to a government-run system, disrupting the existing healthcare plans for those who like their current health plan.  

Some argue for a “public option” to private health insurance.  Inevitably, the public plan will become either an unattractive service used by only a few or only the poor, or will be unfair competition to the private insurance companies.  The latter would rapidly evolve to a single payer system, and the former would be either ineffective or (if used only by the poor) would establish tiered health care with continuing big discrepancies between the healthcare (and therefore the health) of the haves and the have-nots. 

Also, public option schemes invariably involve a continuation of employer-paid health care with all the attendant disadvantages including:

·         People can’t choose between all insurance companies, only the one or two with which their employer has contracted.

·         People can be forced to change insurance companies when they change jobs or change their marital status.

·         Employers continue to incur the significant cost of providing employee healthcare insurance, including significant administrative costs. 

·         The government continues to lose the tax revenue forgone by income and payroll tax deductions associated with employer-based health care (currently $220 billion per year).  

Any healthcare reform proposal that mandates or encourages employers to provide healthcare benefits to employees will not overcome such drawbacks, but will prolong them.

It is concluded that the healthcare scheme described above, or some refinement thereof, is the best choice for the United States.  

-oOo-

A Concise Discussion of Climate Change

This writing attempts to concisely explain how humans are contributing to climate change and the potential ramifications and options.  

The Earth’s climate is the result of very complex interactions between a myriad of physical, chemical, and electromagnetic phenomena, including sun activity, continental drift, ocean currents, atmospheric composition and currents, vegetation, volcanic activity, earth's varying orbit around the sun, etc.  Study of fossil and ice core records tells us that the earth has undergone major changes in its climate in the past, and major changes will likely occur in the future.  The record indicates some cyclical patterns to climate change, including a cycle of global warming and cooling, the latter resulting in “ice ages”.  Except for rare catastrophic events such as a large asteroid colliding with Earth or a super volcano explosion, the Earth’s climate has changed very gradually in the past.  For example, it has taken thousands of years of very gradual cooling to produce an ice age and thousands of years of very gradual warming to end an ice age.

Since the start of the industrial revolution, the amount of carbon dioxide in the atmosphere has been increasing at an ever-increasing rate, and is now changing much more rapidly than can be explained by the normal cycles.  The Earth’s average global temperature has increased in a similar pattern over that time.  The consensus of mainstream scientific opinion is that increasing CO2 in the atmosphere causes a temperature rise by a greenhouse effect, and that human activity is the primary cause of this increasing CO2 level (http://www.aip.org/history/climate/summary.htm,http://en.wikipedia.org/wiki/Scientific_opinion_on_climate_change).  Modern humans release carbon dioxide into the atmosphere by several means, especially by burning fossil fuels.  Meanwhile, the clearing of forests has reduced the rate of re-capture of CO2 by the Earth’s vegetation.  

The fact that the CO2 levels and Earth’s average temperature and sea level are currently rising rapidly and unexpectedly (based on the gradual background rate of change) is not in doubt (http://www.epa.gov/climatechange/science/recenttc.html).  They are continuously measured by instruments and well documented.  At present, the average global temperature is increasing at a rapid rate and the Earth’s store of ice (e.g., at the poles and in high glaciers) is melting rapidly (http://en.wikipedia.org/wiki/Retreat_of_glaciers_since_1850).  Scientists attempt to model the Earth’s natural systems to predict future increases in temperature and ice melt, but such models are not accurate.  The most recent measurements indicate that such models have underestimated the amount of temperature increase and ice melt.

Scientists are also unable to accurately predict the resulting climate change and impacts on Earth’s flora and fauna, including humans.  It is likely, but not certain, that rising temperatures will result in a much greater release of CO2 from methane release from melting permafrost.  Melting ice can also result in less reflection of the sun from polar regions and therefore more warming of oceans from direct solar radiation.  There are numerous potential mechanisms for rapid change, some of which cancel each other and some that reinforce each other.  Some may result in higher local temperatures at some times of the year in some locations while others may result in lower local temperatures.  Secondary effects on climate may include more or less rainfall or snowfall at some locations, more or fewer violent storms at some locations, more or less day-to-day wind at some locations, etc.  We just don’t know.

How much will the sea level rise?  How will climate change where I live and how rapidly?  What animals and plants will be helped or hurt?  How many humans will have to be relocated at what cost?  What will be the impact on agriculture and what will be the overall economic impact?  We are already observing some directly measurable effects including the demise of polar bears, certain penguins, and other ice-dependent animals and plants.  But in general, we just don’t know what is in store.

We know that we and the animals and plants can continue to live very well if climate does not significantly change - it has not changed significantly over the past few thousand years.  But the current rapid rate of warming is predicted to result in a similarly rapid, or more rapid, rate of change in climate and associated environmental conditions - a rate of change that does not give any living thing time to adapt via evolution.

We can continue our current practices and hope that the impact of human-caused climate change will not be too great.  Or we can change our practices to drastically reduce our impacts, especially CO2 emissions and deforestation.  The cost of doing the latter may be less than the former, and it has other benefits including reduced air pollution and associated health risks, and reduced international strife due to competition for limited oil resources. 

But perhaps the most compelling reason to change our ways is to simply avoid that rolling of the dice.  We may get lucky (climate changes may turn out to be mild and have only small negative impacts) but we may get very unlucky.  Changing our practices seems like a prudent insurance policy, given what is at stake.  

Introduction to Reasonspeak

This blog was established to discuss ideas for increasing the world happiness index (subjective well-being).

Improving the lot of just one person, as long as it is not at the expense of another person, increases the world happiness index. Improving the lot of millions of people can result in a huge leap forward for mankind.

The authors consider all things to be possible with reasoned and rational action. Other philosophical underpinnings include thinking long term and identifying win-wins. Wealth is not considered necessary for happiness, but used wisely it can help increase happiness.

There is not a fixed amount of happiness in the world such that any increase for one person must be at the expense of another. Rather, there is no limit to the amount of happiness that can be generated, and all people can continually increase their happiness.

The term "happiness" is used as a simple replacement for longer, more descriptive phrases such as "subjective well-being" or quality of life. Different people will find different things or concepts more important. Each person should substitute whatever combination of terms is most meaningful to them. Some examples include; pleasure, contentment, well-being, happiness, serenity, relaxation (or freedom from stress), satisfaction, comfort, tranquility, peacefulness.

An infinite number of things may affect a person's "happiness" or quality of life. Examples include; health, family, friends, community, exercise, opportunities for human interaction, intimacy, food availability, housing (shelter), environment (views, sound, air quality, air temperature, water quality, calm, sunlight, etc.), employment, safety, financial security, freedom of movement, freedom of speech, freedom of choice, religion, opportunities to help others, hobbies, opportunities and abilities for artistic expression, education, access to knowledge, privacy, availability of assistance when needed, acknowledgement of one's worth and contribution, availability of transportation, freedom from coercion and bullying, freedom from fear, freedom from stress, opportunities for personal growth, personal property security, etc.

In striving to maximize the world happiness index it seems important to remember that an item desired by one person as having a positive impact on their quality of life might not be of interest to others. Ideally, each person can attain the conditions most advantageous to them.  One size does not fit all.