Peter Yastrow's Blog

The Healthcare Problem

The doctors are getting too good. That is the problem. PERIOD.

The medical field has made unbelievable strides over the past decades. Diseases like polio and tuberculosis have been almost wiped out. Many cancers are now curable, and as I know all too well, even the terminal cases which used to take lives in months, now are successfully fought off for years. Patients used to get a disease and die. Now patients get a disease, and with the help of doctors, nurses, radiology teams, etc., they will often survive for years. Families pride themselves on beating the odds and outlasting the experts.

It costs money to fight disease. The patient used to succumb to the disease. Now, thanks to modern science, the patient survives… until the patient gets another disease, and spends money to fight yet again. As doctors develop cures for diseases and ailments, they are increasing the cost per patient. Patients survive cancer to die from heart disease. People receive artificial knees and hips as opposed to living with pain. Even if the patient is very old, and is failing in health, doctors are encouraged and expected to “do everything possible” to save our relative and loved one. Doctors will fight the good fight and spend hundreds of thousands of dollars on every single patient.

As medicine gets better and better, the cost per patient will go higher and higher.

The problem will not go away. The costs will not come down. Maybe there is over-billing and ridiculous added charges, but that is a small symptom of the bigger problem. The real problem, the one that will still be sitting like a 2-ton elephant in the room, remains.

How much health care spending is too much ?

Doctors will find more and more ways to keep us alive, reduce our pains and relieve our suffering. The decision to accept or reject treatment is not always an easy one. Life or death. Fight on, or quit. I have been forced to make such a decision. I have said, “Enough.”

I must also admit that I did not for one second concern myself with the healthcare system or the costs to the system or the burden on the system. There was no cost-benefit analysis performed. We fought, until she couldn’t.

We are not ready to tackle health care. We are not ready to decide who shall live and who shall die. Whose pain is great, whose pain is tolerable. We are not ready to place values on human life. These ethical questions need to be resolved if we are going to have uniform health care.

We can not spend an unlimited amount of money on patients – or we will bankrupt the system. Let’s all slow way down. Lets try to understand why the system is in trouble presently. Our system is too good. We keep saving people. We keep living longer and longer, and the cost per patient continues to rise, but we don’t want to pay more.

So now we will get the junior senator from Illinois— oops, I mean President Obama— to fix the system. It will be a disaster. The system is flawed. We want all the procedures and treatments and lotions and potions we can get our hands on. We want to live forever, and we want someone else to pay for it. Unless the government rations healthcare— the system will go bust.

I hereby warn you: if the healthcare bill passes, the government will have no choice but to ration healthcare. Not everyone will get treatment. Not everyone will be approved for a needed procedure.

In the short run, there might be savings. Maybe we will see a few years of lower costs, as we streamline and improve record-keeping and claims processing. But these will be very short-lived savings and will not be enough to offset the real problem. Eventually we will have to decide who is worth saving, and why. Should an 80-year-old man get a knee replacement? If he can afford it? If he is a citizen? Should a six-year-old child get chemotherapy? Should we prolong the life of a terminally ill person?

Nobody should have to make these decisions. But even worse– would be a government making them for us.

Joy to the world – Peter

Tags: disease, ethics, healthcare, Obama

Home of the Bravado

Our standard of living in this country is the highest in the world. Some attribute this to our creativity and our American ingenuity. I believe it is a direct result of our place on the globe. Location, Location, Location– The 3 most important factors in evaluating a country.

The industrial revolution occurred from 1894 to 2008. During this time, every country had major wars and dramatic political upheaval.

Governments were unstable. Yet here in the Land of the Free and the Home of the Brave, we had the same excellent form of government, and no wars. (Yes we were in wars but never did we have any fighting at home. Hawaii doesn’t count.) During the entire Industrial Revolution, only the United States was left unscathed and intact, while every other nation was severely affected. Bombs flew in London; Nazis invaded France; a goddamn nuclear weapon was dropped twice on Japan. While here in the United States, we had some really heavy civil disobedience, man.

The bottom Line: Because we have had a stable government and no fighting on our own soil for over a hundred years, the United States has been able to achieve the highest standard of living of any industrialized nation.

We had the huge explosion of technological innovation at a time when our country could capitalize on the opportunity. When the sun was shining, the United States made hay. We are not smarter or faster of more creative than other humans around the world. The amber waves of grain don’t infuse us with creative juices. Our amazing lineup of primetime TV is not creating droves of outside the box thinkers. Our high standard of living, and our arrogance as well, is due to our stable government, safe location here on the other side of the earth and lots of natural resources.

The Industrial Revolution is over. The world has gone from an agrarian society to an industrialized society. During this dramatic advancement of mankind, the United States was situated perfectly and benefited more than any other nation in terms of standard of living, per capita incomes, infant mortality rates et al. It would be a terrible mistake to attribute our good fortune to our unique individual talents. It would be wrong to conclude that we are better than the Europeans and Asians.

Rather our “soil” was just more fertile. Our ideas could grow and produce fruit, because political storms were not thrashing us. Let’s not be arrogant and think of ourselves as special. NASA used Saturn rockets that were Werner Von Braun of Germany’s ideas. The rocket was first conceptualized in China.

Mike Ditka said, “Neither success or failure is permanent.” If our country wants to continue to enjoy our number one status, we must understand how we got there in the first place. We need to keep the economic landscape fertile. Our government needs to foster growth and promote stability. People are capable of great things; let’s make sure our government does the right thing- and stays out of the way.

Joy to the world - Peter

Tags: industrialization, Mike Ditka, US arrogance, war

Keynesian Policy – Obama’s Folly

It is pretty simple.

A company borrows money in the form of a loan or a bond offering, and uses the proceeds on new computers and machines, et al,. It is in the company’s best interest to take on debt, because the increase in revenues or savings will more than offset the costs of borrowing the money.

I remember my father’s company, which manufactured women’s dresses, buying a huge computerized pattern-making machine in the early 1980’s. The savings on fabric and man-hours were enough to pay off the investment in 2 years. That implies borrowing money at 49% or less to buy the system was a profitable investment. Clearly, borrowing money, and investing in productivity-enhancing projects, as Martha Stewart would say, is “a good thing.”

So what if a country did the same thing?

Suppose our country borrows money for investments that would lead to more prosperity and more efficiency. It should stand to reason that a country on a macroeconomic level should find the same positives as an individual company would on a microeconomic level. That is the essence of Keynesian Economics. That is why it works.

Keynes’ theory is the underpinning of the economic policy that President Barack Obama’s team is supposedly following.

Obama’s stimulus plan was announced, with great fanfare. (Nancy Pelosi, like the cheerleader who doesn’t know offense from defense, keeps flashing in my mind.)

Maybe it could work… the United States would borrow heavily and invest in the future, just like my father’s company did. But, not even 48 hours later, in reaction to screams that the deficit would explode, Team Obama announced that they were now going to reduce the deficit, by taxing the top income earners. That’s not Keynesian policy- that is robbing the rich to feed the poor.

The stimulus plan is really a good old-fashioned South Side shake down. The government is borrowing huge sums to spend on crony “shovel-ready” projects. Then they are raising the taxes on the wealthiest citizens to pay for the increase in the debt. The projects literally include paving of roads, the classic teamster cliché.

Let’s Review:

DAY 1: Obama says, “Stimulus” and approves a trillion dollars of spending.

DAY 2: Backlash that the deficit will balloon

DAY 3: Announce a new tax on the wealthiest Americans.

I am not sure if Keynes was even right in the first place. Borrowing huge sums of money on a country-wide scale has dramatically different effects than it has on a small company. When countries borrow, it impacts factors like money supply and exchange rates. But, even if Keynes were right, it wouldn’t matter! This plan that is being pushed though is not Keynesian. With its tax hikes and wealth redistribution, this plan is not a Keynesian policy. It is more of a Robin Hood policy.

The stimulative effects we desperately need are lost. There is no stimulation or improvement to our living standards. The possible benefit was lost in two areas. The projects are not ground-breaking or innovative, but more “repair and repave” in nature. These projects, while necessary, are not going to advance the society, but rather maintain it. The second problem with the stimulus plan is that it simultaneously will deplete the ability of the wealthiest Americans to spend and save. This change in their consumption patterns will have an impact on all of the businesses and industries that rely on the rich people.

Think of it like this: The government is hurting the boat dealer to help the bricklayer. It is about as stimulating as a game of tag.

Joy to world – Peter

Tags: economics, Keynesian, macroeconomics, Obama, Pelosi, recession, Robin Hood