Sunday, July 29, 2007


July 29, 2007


With the release of Michael Moore‘s new film, Sicko, it seems appropriate to offer a summary view of American healthcare. Many Americans remain unaware of the regime under which they live, until hit by illness or accident. Canadians, debating needed improvements for their system, often argue with little understanding of the bizarre realities of America’s.

As someone who has lived roughly half my life in the United States and half in Canada, and as an economist by profession, I think I can provide a vivid sketch of American healthcare.

There actually is no system.

There is private health insurance for most middle-class people, and the tradition, not a requirement, is that this is paid by your employer as an employee benefit.

Since there are about 1,500 insurance companies looking for this business, the nature and quality of the policies vary immensely.

For a privileged cut of the population - those working for the government and large corporations and legislators - the benefits are very good, and they get excellent medical care.

As you may imagine, the quality and quantity of the benefits goes down as you move down the prestige scale. For a more typical office worker, there will usually be many limits on the policy. Examples: an annual $1500 deductible; a 15-20% deductible for each procedure; and, in some cases, coverage that is as low as 60% of costs.

This is why health care is the single largest cause of personal bankruptcy in the U.S. Inflation in fees and costs by the health-providing industry means that a single-day as an outpatient with some relatively minor procedure - has a full cost on the order of $7,000 when all the bills are in.

I say 'when all the bills are in' because the patient for weeks after the procedure will receive bills: from each doctor, from the anesthetist, from the hospital, from laboratories, from the ambulance company, etc. There will be items on your bill, on a long computer list, like $150 for the use of a scissors or $10 for some aspirins in a cup.

Under some insurance policies, you pay and are later reimbursed. This can still cause a cash crunch where the bills are high. Under other policies, the bill you receive will be for the residual after separate billing to your insurance.

In any case, if you do not pay the balance fairly promptly, your file will be turned over to a collection agency who will then hound you daily for the money.

There are invariably disagreements with the insurance company over specifics. You usually have an 800-number where you will often wait a long time to talk to call center about the issue. Because of the complexity of the terms of a given policy, you will have to be well-informed even to discuss your point.

On some policies, even pretty decent ones, you are required to call an 800-number before going to the emergency room to get the insurance companies permission for what you are doing. Otherwise, you will pay the emergency-room bill yourself.

But even for pretty good insurances, typically policies have lifetime limits on benefits. If you are struck with something really seriously expensive, you will reach the end of your benefits.

Note the fact that very good to excellent coverage for upper-middle class and government people effectively silences those who would be active in changing the system.

This is a key reason why the healthcare chaos never becomes a burning political issue. It also provides a lever to be used if someone, as the Clintons did, wants to reform things. Upper middle-class people were directly appealed to, being told in a barrage of ads that the excellent level of their care would be reduced, a very effective ploy.

For many of the privately insured however, benefits range from mediocre to terrible. America has more than forty million with no benefits, but a statistic never given, and more important, is the huge number of under-insured.

Note that you can approach some companies to buy your own insurance if your employer provides none. Because you are not part of pool in these circumstances, your fees will be very high. The benefits are also likely to be poor to mediocre.

The industrial sector of the U.S. has badly declined for decades, and with its decline the opportunity for decent, employer-paid insurance for most working people. The growth sector of the economy is services, and these places typically offer poor or no insurance. Of course, many of these are the infamous McJobs.

People in non-union factory or middling office jobs or much of the service industry get benefits so limited that a serious event can throw them into bankruptcy. This is how the policies, where they are available, are priced low enough for such employers to afford.

There are many other disturbing elements in this national healthcare chaos.

For example, your private health records are in the hands of private insurance companies, and this is marketing information in which they trade for profit.

It is possible for your private health-care information to disqualify you from employment somewhere else.

People with better policies hang desperately on to their jobs for fear of losing coverage in middle-age, just when you most need it.

Morality enters American health care, as some private companies will not cover procedures such as abortion.

You may have a policy with which you are quite satisfied, but for some reason, usually cost-cutting, your employer may change insurers suddenly. You will be faced with a whole new set of qualifiers, requirements, 800-numbers, deductibles, and limits. And this can happen a number of times in your career, and it is very unsettling.

Companies deeply concerned about costs will gradually work their way down from excellent policies to mediocre ones. You must adjust accordingly.

There are hundreds off details not possible to cover outside of a major essay. As an example, not many years ago, if you lost your job, you, in most cases, immediately lost your insurance. Too bad if you or your child had chronic needs. Now, there is a time-limited bridging mechanism - for which you must apply, fill out forms, and pay – that allows you to be insured until you secure your new job with new insurance.

The chaos includes often-impoverished county hospital emergency wards for the really poor. These will still try getting some degree of payment out of you according to your means. In general, the care in such places is poor. There is the Veterans’ Administration system for qualified ex-soldiers. There is Medicare for retired Americans, a system whose benefits are completely inadequate to modern needs. If you retire without a supplemental insurance – either paid by your past employer in a good job or by yourself in other cases - you may face serious problems.

There is the Medicaid system for poor Americans. It is an extremely complex system, and the extent and nature of benefits vary considerably from state to state. If you move from one state to another you can lose coverage for the services you were using before. Again, depending on the state, you may be required to make co-payments for services. You really do have to be needy to qualify for benefits, and your means are examined in detail. For some Medicaid services, officials are entitled to recover expenses from a beneficiary’s estate.

Private hospitals in the U.S. – generally the best but not always – are in various jurisdictions required to take a certain quota of non-insured patients. This quota is never generous. The cost of this effectively gets dumped onto the insured, increasing the cost of insurance.

This also leads to some bizarre results. Suppose you are an uninsured person picked up on the street by an ambulance after an accident. The ambulance will be calling ahead to the nearest hospital to see whether they can take another uninsured. If the answer is no, another hospital is called. This continues until there is a taker, however, by that time, you may expire in the ambulance, a not uncommon event.

Imagine the horrors as an uninsured person, whether a citizen or a visitor from abroad, of getting mugged in the United States? First, there is the horror of the mugging or rape or assault, and then the horrors of dealing with the Medical Kremlin.

This brief review gives you a realistic sketch of healthcare in America. If you are young and healthy, you need not be overly concerned. Of course, it is precisely the pool of young and healthy people that insurers love, because their employers pay but the employees don’t use many benefits. That is why institutions like the high-tech industry or huge multi-national corporations have such good policies. They get used comparatively little.

The entire ‘system’ segments the population into many different pools, from low risk with excellent benefits to high risk with terrible benefits. It truly is medical Social Darwinism, organized by lawyers and financiers.

An important after-thought.

The United States has about the highest rate of infant mortality of any country in the advanced world.
Average life expectancy - average for the population, not just for the privileged like Rudy - in the United States is significantly lower than in a place like Canada with a public healthcare system.

These two facts often surprise people who do not know the United States well, always thinking of it as the richest place with the biggest and best of everything. Simply not true.

Thursday, July 12, 2007


July 12, 2007


Why does terror dominate our headlines and the attention of our governments going on six years after 9/11? The answer cannot be what George Bush says that it is: it is not the fault of people who hate democracy and freedom.

We know this for a great many reasons. One of the world’s oldest terrorist organizations, the IRA, had no interest in British government and society. It was interested only in being free of their control.

We know Bush is wrong also because the people who genuinely hate democracy and freedom - the world’s oligarchs, dictators, and strongmen - are people who hate terror themselves because it threatens their security.

Strong absolute states have no tolerance for terror. The Soviet Union never had a serious problem with terror, neither did East Germany, nor did Hussein’s Iraq.

Absolute states are also frequently supported by, or allied to, the United States, presumably for reasons other than promoting terror. We don’t need to go into the long history of the Cold War to find this. It remains true following 9/11. Contemporary examples include Pakistan, Saudi Arabia, Kuwait, and Egypt.

Bush is wrong, too, because all evidence, whether from polls or interviews or writing, shows that people living in lands without democracy overwhelmingly would embrace freedom were it available to them.

Of course, all such generalizations are statistical in nature. That is, they are about trends or tendencies that reasonably describe the overwhelming bulk of specific examples. There are always exceptions, extreme examples, what statisticians call outliers, but you cannot talk about any subject sensibly when you talk about only exceptions.

We also know, despite truckloads of publicity saying otherwise, that terror is not by any measure one of the world’s great problems. The number of people killed in the World Trade Center, the largest terrorist attack by far, was less than one month’s carnage on America’s highways. It was equivalent of about two months of America’s murdering Americans on the nation’s streets.

Terror is intended to frighten and intimidate people, its secrecy and methods calculated to make deaths, even a small number of them, more shocking than everyday deaths. But if we look at societies that have undergone horrors beyond most people’s ability to imagine, horrors greater than any modern terror, we find something very interesting.

Life in London carried on during the Blitz. Germany maintained a huge armaments production despite thousand-plane raids day and night. The people of Leningrad, despite 800,000 deaths from being shelled and starved during the German siege, managed to carry on a kind of society. People in Sarajevo made do through a long and agonizing terror. Even the seemingly-hopeless inmates of death camps often made remarkable efforts to maintain some semblance of normality.

Perhaps the greatest terror experience in modern history was American carpet-bombing in Vietnam. We know from Vietnamese war veterans that these were their most feared events. They were horrific, and the United States left Vietnam having killed something like 3 million people, mostly civilians. But it did leave, and the people it bombed so horribly won a terrible war.

Now all of these experiences, plus many more we could cite, have the elements of randomness for victims and methods that just could not be much more horrible. They all are experiences in terror in the broadest sense. What they tell us is that terror does not work, despite its ability to make people miserable.

I like the anecdote that following the atomic-bombing of Hiroshima, within weeks, wild flowers were spotted growing in the cracks of the pavement. I very much like to think of that as representing the human spirit.

Terror as we traditionally think of it is a method of redress or vengeance for those without great armies or powerful weapons, those at a great disadvantage vis-à-vis some powerful oppressor or opponent. Generally the grievances behind terrorist acts are reasonable demands that have been ignored or have even been suppressed for long periods of time.

Although sometimes, they are unreasonable demands, but in this they are no different than the grievances that often lead to wars or invasions or occupations by powerful states.

Terror generally kills innocent people, something no decent-minded person can accept, but what is always forgotten in the press and government treatment of terror as something alien and unimaginably bad is that war in the contemporary world does precisely the same thing.

We have a powerful trend over the last century shifting the victims of war from armed forces to civilians. In World War I, there were many civilian deaths, but most of went on at the front was the killing of soldiers. By the time of Vietnam, and even more so Iraq, literally most of the deaths are civilians, overwhelmingly so. The fire-bombing and nuclear-bombing of cities during World War II marked the first great shift, returning military operations effectively to the world Before the Common Era when sacking and raping cities was ordinary.

Why has this happened? The chief reason is increasingly destructive weapons capable of being used from a great distance. Those pressing the buttons not only don’t see what they are doing in any detail, but the damage of which they are capable increases every year. A single plane today can drop enough munitions to destroy utterly a small town. In 1917, a plane could carry enough munitions to destroy a small house, if the pilot were lucky about air currents and other variables.

America makes claims about using ‘smart’ weapons, but these claims are highly deceptive. First, smart weapons are costly, and most bombs dropped are still ‘dumb’
ones. The percentage used in the first Gulf War, a time when there were many press conferences glorifying precision weapons, was on the order of five percent smart weapons.

Second, smart weapons require excellent intelligence, something you cannot have under many circumstances. The infamous bomb-shelter event in Baghdad during the first Gulf War, which incinerated four hundred civilians in an instant, happened because American officials thought there were party officials hiding there, but they were wrong.

Third, even with intelligence, decisions are made which are poor ones. The Baghdad bomb shelter is an example here, too. Even were there some party officials there, killing nearly four hundred others to get them was the kind of savage decision Israel so often makes to its shame.

Fourth, smart weapons do make mistakes with chips or programming or flight controls that are faulty.

Fifth, the better the weapons get, the more the temptation to use them, and the more they will be misused by poor judgment and poor intelligence.

There is no prospect in our lifetime that so-called precision weapons can change the tendency towards killing civilians rather than soldiers.

Terrible weapons are under constant research efforts at ‘improvement.’ The United States has developed gigantic flammable-liquid bombs, the size and weight of trucks. It is busy developing compact nuclear warheads that are, in the view of the kind of people associated with George Bush, both useable and practical.

The problem with modern weapons is not only their great power and complete removal of users from ghastly results, it is their capacity to alter the psychology and morality of those possessing them.

Where great power exists, it tends to be used, sooner or later. This intuitive idea was part of the reason in the eighteenth century for opposing large standing armies. Expert historians have attributed at least part of the cause of World War I to huge standing armies and a ferocious arms race.

It is hard to think of a horrible weapon that has not been used fairly soon after its development: the flame thrower, poison gas, germ warfare, machine guns, landmines, cluster bombs, napalm, and nuclear weapons.

Imagine the psychology of politicians and war planners in Washington, sitting in air-conditioned offices, perhaps just returned from expense-account lunches, discussing developments in, say, Iraq. They don’t see or hear or smell the misery of a people without sanitation or electricity – these having been deliberately destroyed by the United States in the previous Gulf War and never repaired. These planners, looking at charts on their expensive laptops, only know from certain graphs that they have what they see as a problem and that they have the ability to reduce it or make it go away, almost like wishing away something you don’t like.

The solution comes down to such pragmatic considerations as to whether Tomahawks or B-52s or a wing of fighter-bombers will best meet the ‘need,’ and perhaps the availability of each, and perhaps even comparative benefit-cost ratios (kills per buck), also charted on their laptops.

If this isn’t the banality of evil, I don’t know what is. And when the planners decide which weapon or combination of weapons will best alter the graph, the orders go out, the buttons are pressed, and no one but the poor half-starved people living in dust and squalor have any idea of what actually happens, which people in the neighborhood have their bodies torn apart or incinerated, which houses are destroyed, which children mutilated. The people who carry out these acts see only puffs of distant smoke.

This is modern war as practiced by an advanced society.

On a smaller scale than Iraq, we’ve all read the endless reports of Israeli incursions and assassinations: an entire family wiped out on a beach by distant shelling, an apartment building full of families hit by a missile intended for one resident, pedestrians cut into pieces as a missile hits a targeted car on a crowded street. All of it is put down to stopping terror, all of it is done from a safe distance, all of it kills mainly civilians, and all of it is indistinguishable from terror.

If challenged today for a definition of terror, I doubt anyone could produce a sound one that limits the meaning to the acts of those constantly in our headlines. Rather those acts are now reduced to special cases of something a great deal larger.

Which was the more ghastly act of terror, 9/11 or the invasion of Iraq? 9/11 killed about 3,000 people and destroyed a building. The invasion of Iraq killed more than 600,000, destroyed the irreplaceable records and artefacts of an ancient civilization, and left a nation of more than 20 million desperate for work, clean water, and electricity. And it should be stressed that although 9/11 came first, there were no connections between these events, except that the one was used as an excuse for the other.

When we hear the word terror in the news, we are conditioned to think that only civilians have died, but how is it different now for news of an attack by American forces or a reprisal raid from the Israeli army? It isn’t. We know immediately that civilians die every single time. Indeed, what we often do not know is whether any “bad guys” were killed.